A moving average smooths out the noise of individual candles to show the underlying direction of price. Instead of reacting to every tick, you see whether the market is generally rising, falling, or going nowhere. It's the foundation most other tools are built on.
SMA vs EMA
A Simple Moving Average (SMA) is the plain average of the last N closes, every price weighted equally. An Exponential Moving Average (EMA) weights recent prices more heavily, so it reacts faster to new moves and lags less. Traders tend to use EMAs for entries because of that responsiveness, and SMAs for the big-picture trend.
The 200-day line
The 200-day moving average is the market's most-watched trend filter. Price above it is broadly considered a bullish regime; below it, bearish. Because so many participants watch it, it often acts as support or resistance on its own. Using it as a simple on/off switch, only taking longs above it, only shorts below, filters out a lot of low-quality trades.
Crossovers and pullbacks
When a faster average crosses a slower one (say the 50 crossing the 200), it signals a possible trend change, but it lags, so it confirms rather than predicts. A more timely use is the pullback: in an uptrend, price dipping back to the rising 20- or 50-EMA and bouncing is a classic continuation entry. Several LazyChart strategies use exactly this structure.
Informational and educational only, never financial advice.