In general, the simple moving average is used more because it is the default MA, and the simple moving average is used by more traders to make trading decisions than the exponential MA ( EMA). Many new traders will also start off with the Simple MA, though the EMA will react more quickly to the price.

The most common moving average used in technical analysis is the Simple MA 200. Even financial news channels like CNBC or Market Watch will discuss this line when it is crossed by the price. It is the most important line that tells the trader that the bears or the bulls are prevailing, and it is also the most important line of resistance or support. Even legendary trader Paul Tudor Jones mentioned this line in his lessons:


" My metric for everything I look at is the 200-day moving average of closing prices. I've seen too many things go to zero, stocks and commodities. The whole trick in investing is: “How do I keep from losing everything?” If you use the 200-day moving average rule, then you get out. You play defense, and you get out."

The second most popular MA to catch the big wave is the MA 50. It is an important tool for many growth traders and investors, even legendary trader William O’Neil uses it on the chart. In his CANSLIM investment strategy, he advises buying a stock when it corrects to the MA50 during an uptrend.


The third most popular MA is the 10-period MA. The MA 10 is used on daily trader charts, and trend traders often use it in crossover signals when combined with the moving average 50 or the 30 lines. It can also be used as an instrument to trailing stops. Marty Schwartz also recommends this route:

“The 10-day EMA is my favorite indicator of mainstream trend identification. I call it 'red light, green light' because you have to choose the right direction of the market to have your advantage. When the price is above the 10 EMA you have a green light, the market is in an uptrend and you should buy. Conversely, when the price below this line is a red light, one should think about selling short. "