Moving Average (MA) is one from so many forex technical indicators often used by most traders in technical analysis. The length of the period selected for constructing the averages.

Suppose you want to compute 5-day averages from the chart, the 5-day moving averages consist of a series of means obtained over time by averaging consecutive sequences containing five observed values.

The first of these 5 days moving averages is computed by summing the values for the first 5 days in the series and dividing by 5. The second of these 5-days moving averages is computed by summing the values of years 2 through 6 in the series and then dividing by 5, and so on.

Moving Average is a smoothing tool, by taking the low and high price and take the average from it. So the moving average price will be behind the market price.

From the image above, the green and blue lines are the moving averages, with different timeframe. Larger timeframe will make the moving average line smoother than shorter timeframe. Traders usually can predict the market movement from this moving average lines.