Moving averages
Simple, exponential, the 200-day, and how late a cross can be.
Compute a simple and an exponential moving average by hand and say what each one weights. State the lag of an n-period average in bars, explain why an average can turn up on a day price fell, say why the 200-day is watched without treating it as a wall, and count exactly how late a golden or death cross is on a series where the answer can be checked.
5 chapters · 6 quiz questions · 10 terms · included with a plan
Otus, on this module
A moving average is the most honest indicator on the chart, because it does not pretend to be anything but what it is: the typical recent close. The trouble is always what gets said about it — "support", "the trend", "a cross". Learn to count how many bars behind it is, and every one of those words gets a number attached.
The chapters
Each module ends with you doing what it taught — a written answer Otus reads, and a quiz.
- 01 · Read
Simple and exponential
Two ways to weight the recent closes, and what "lag" is in bars.
- 02 · Read
The 200-day
Why it is watched, what moves it, and why it can rise on a down day.
- 03 · Read
Golden cross, death cross
Two averages meeting — and exactly how late that is on a series you can check.
- 04 · Watch
Watch: SMA versus EMA
One minute, then the step ticks itself.
- 05 · Write
In your own words
Two or three sentences. Otus reads them.
- 06 · Quiz
Six questions
A wrong answer still pays. It costs the combo, not the XP.
10 terms this module defines
The same definitions Otus uses in the lessons. All of them are in the trading glossary.
- Moving average
- The average of the last n closes, recalculated every bar. A smoothed record of the typical recent close, which by construction sits behind price, never ahead of it.
- SMA
- Simple moving average: the last n closes added up and divided by n. Every close in the window counts equally and drops out completely when it leaves.
- EMA
- Exponential moving average: each bar it moves a fraction 2 ÷ (n + 1) of the way towards the new close. Every close stays in, with a weight that shrinks each bar.
- Lag of an average
- On a steady trend, an n-period SMA or EMA trails price by about (n − 1) ÷ 2 bars. The EMA only reacts faster in the first bars after a sudden change.
- Drop-off effect
- An SMA changes by the new close minus the close leaving the window, divided by n. It can turn because of a close from long ago, not because of anything today.
- 200-day moving average
- The simple average of the last 200 daily closes, about forty weeks. Watched mostly because it is widely watched; it trails a steady trend by about a hundred trading days.
- Golden cross
- The 50-day average crossing above the 200-day: the last 50 closes now average higher than the last 200. A late summary of a rise that is already well under way.
- Death cross
- The 50-day average crossing below the 200-day: the last 50 closes now average lower than the last 200. As late, by construction, as a golden cross.
- Moving-average crossover
- A faster average crossing a slower one. It confirms a move after the fact and crosses back and forth in sideways markets; MACD's zero-line cross is one.
- Price above its average
- Recent closes are higher than the typical close of the window. Useful context about the past; not a level that holds, and not a trend definition.
Finishing it pays 150 XP and 3 keys on the game board, on top of what each chapter earns. XP measures what you learned — never what you earned. How levels work.
Education only. Nothing here is a recommendation to buy or sell anything; the school teaches reading charts, never predictions.
Start with lesson one.
The first modules, Otus as your tutor and the game board are free. No card needed.