How to set up moving averages on a crypto trading chart?

Moving averages help crypto traders identify trends by smoothing price data, with EMA offering faster signals and SMA providing steady long-term insight.

Aug 02, 2025 at 06:21 pm

Understanding Moving Averages in Cryptocurrency Trading

Moving averages are among the most widely used technical indicators in the cryptocurrency trading space. They help traders smooth out price data over a specified time period to identify trends more clearly. A moving average (MA) calculates the average price of a digital asset across a set number of past periods, such as 9, 20, 50, or 200 candles. By doing so, it filters out short-term price noise, offering a clearer view of the underlying trend. There are several types of moving averages, including Simple Moving Average (SMA), Exponential Moving Average (EMA), and Weighted Moving Average (WMA). Each has its own calculation method and sensitivity to price changes. For instance, the EMA gives more weight to recent prices, making it more responsive to new information than the SMA.

Selecting a Trading Platform with Charting Tools

Before applying moving averages, you must choose a crypto trading platform that supports advanced charting features. Popular platforms include TradingView, Binance, Coinbase Advanced Trade, and Kraken Pro. These platforms offer built-in technical analysis tools, including customizable moving averages. On TradingView, for example, users can access a full-featured charting interface directly through a web browser. To begin, log in to your account and navigate to the chart section. Select the cryptocurrency pair you want to analyze, such as BTC/USDT or ETH/USD. Ensure the chart is set to your preferred time frame—options range from 1-minute to 1-week candles. The choice of time frame affects how the moving average appears and behaves, so select one that aligns with your trading strategy.

Adding a Moving Average to Your Chart

Once your chart is loaded, locate the indicators or studies button, usually represented by a "f(x)" icon or labeled "Indicators" on the toolbar. Click it to open the indicator library. In the search bar, type "Moving Average" to filter the results. You will see multiple versions, such as Simple Moving Average, Exponential Moving Average, and others. Click on the one you wish to apply—EMA is commonly used for short-term trading due to its responsiveness. After selecting it, a settings window will appear. Here, you can configure the length (number of periods), source (price type: close, open, high, low), and color/styling of the moving average line. For a standard 20-period EMA, enter 20 in the length field and choose a distinct color like green or orange for visibility. Click "Add" or "Apply" to display the moving average on your chart.

• Open the indicators menu and search for "Moving Average"
• Select the desired type (e.g., EMA or SMA)
• Set the period length (e.g., 9, 20, 50)
• Choose the price source (typically "close")
• Customize the line color and thickness for clarity
• Confirm and apply the indicator to the chart

Configuring Multiple Moving Averages for Strategy Development

Many traders use multiple moving averages simultaneously to identify trend direction and potential entry or exit points. A common setup involves combining a short-term MA (e.g., 9-period EMA) with a longer-term MA (e.g., 21-period EMA). When the shorter MA crosses above the longer one, it may signal a bullish trend—this is known as a golden cross. Conversely, a death cross occurs when the short MA crosses below the long MA, suggesting a bearish shift. To add a second moving average, repeat the process described earlier. Use different colors to distinguish between them—blue for the 9 EMA and red for the 21 EMA, for example. Adjust the opacity if the lines overlap excessively. Some platforms allow you to save this configuration as a template, so you don’t have to reapply the settings every time you open a new chart.

• Add a second moving average using the same indicator menu
• Set a different period (e.g., 21 instead of 9)
• Assign a contrasting color to avoid confusion
• Observe crossovers between the two lines for trade signals
• Save the layout as a custom template for future use

Interpreting Moving Average Signals on Crypto Charts

Once the moving averages are displayed, you can begin analyzing price action relative to the lines. If the crypto price is above the MA, it often indicates an uptrend. Conversely, prices below the MA suggest a downtrend. The slope of the moving average also matters—a rising MA supports bullish momentum, while a declining one reflects bearish pressure. In ranging markets, moving averages may flatten and provide little directional insight. Traders also watch for price bounces off the MA, which can act as dynamic support or resistance. For example, in an uptrend, the 20 EMA might serve as a support level where buyers step in. Always confirm MA signals with other indicators like volume, RSI, or MACD to reduce false signals.

Troubleshooting Common Moving Average Setup Issues

Sometimes, the moving average may not appear as expected. This can happen due to incorrect settings or platform-specific quirks. If the line is missing, double-check that the indicator was successfully applied and is not hidden under other chart layers. Ensure the period value is valid—entering "0" or a negative number will cause errors. If the MA seems delayed or inaccurate, verify the price source; using "high" instead of "close" can skew results. On some platforms, zooming out too far may cause the MA to appear jagged or disconnected—adjust the time frame or data density. If you're using a mobile app, restart the application if the indicator fails to load. Clearing the browser cache can resolve display issues on web-based platforms like TradingView.

Frequently Asked Questions

Q: Can I use moving averages on all cryptocurrency pairs?

Yes, moving averages can be applied to any crypto trading pair available on your platform, including BTC/USDT, ETH/BTC, and altcoin pairs. The calculation works the same regardless of the asset, as long as there is price data.

Q: What is the best period setting for a moving average in crypto trading?

There is no universal "best" period. Short-term traders often use 9 or 20-period EMAs, while long-term investors prefer 50 or 200-period SMAs. The optimal setting depends on your trading style and the volatility of the specific cryptocurrency.

Q: Why does my moving average look different on Binance compared to TradingView?

Differences may arise from variations in data sources, candlestick aggregation, or default settings. Ensure both platforms use the same time frame, price source, and MA type. Exchange-specific data delays can also affect appearance.

Q: Can I automate trades based on moving average crossovers?

Some platforms support bots or scripts that execute trades when MAs cross. On TradingView, you can create alerts that notify you or connect to brokers via webhooks. Fully automated execution requires integration with APIs like those offered by Binance or Bybit.