Moving Average

Averages filter out noise i.e., moving average smooths out price data by creating a constantly updated average price. It plots various data points by taking averages of the closing price of an asset over a specific period of time, like 10 days, 1 month, 5 mins or any time period the trader chooses. Moving averages become irrelevant when there is a sudden change in the price trend because of the events like Covid or 2008 housing market crash etc.