How to Pick the Right Moving Averages for Trading

Moving averages are one of the most reliable tools in technical analysis, but success depends on choosing the right ones for your strategy. Here's what traders actually need to know.

First, understand the difference between SMA and EMA. Simple moving averages smooth out price action over a set period—straightforward, but sometimes sluggish. Exponential moving averages give more weight to recent price data, making them more responsive to market shifts. Which one fits? That depends on your trading style.

For short-term scalping and swing trading, faster moving averages (7-day, 14-day, or 21-day) capture quick momentum shifts. They're noise-heavy but react faster to reversals. For longer-term trend followers, the 50-day, 100-day, or 200-day averages filter out market noise and confirm real directional moves.

Many experienced traders use multiple moving averages together—a fast one to catch entries and a slow one to confirm the trend. This crossover strategy helps you avoid false signals and catch genuine breakouts.

The key? Test different periods on your charts, backtest them against your coin holdings and timeframes, then stick with what works. Markets change, so revisit your settings seasonally. Moving average selection isn't rocket science—it's just about matching the tool to your goals.