What is a simple moving average?

A simple moving average is formed by computing the average price of a security over a specific number of periods. Most moving averages are based on closing prices; for example, a 5-day simple moving average is the five-day sum of closing prices divided by five. As its name implies, a moving average is an average that moves.

What are the best moving averages for a 5 minute chart?

The best moving averages for the 5-minute chart are 20 MA and 50 MA. Results are generated on major USD forex pairs (EURUSD, GBPUSD, USDJPY, AUDUSD, USDCAD, and NZDUSD) based on 72 tests on the TradingView platform. We created one more experiment for a 15-minute chart, too. The best Moving Averages for a 15-minute Chart are 8 MA and 13 MA.

How effective is a moving average?

The time frame or length you choose for a moving average, also called the "look back period," can play a big role in how effective it is. An MA with a short time frame will react much quicker to price changes than an MA with a long look-back period.