Moving averages are an important technical indicator of forex trading. They help smooth out the currency pair’s price movement over time. It helps you spot general price trends. For the unversed, these averages are created by averaging out the closing price of the currency pair over a specified number of sessions. As a trader, you can create a moving average of five days, 20 days, or the period you wish. Types of Moving Averages There are many types of moving averages with different average calculation methodologies. However, the most popular ones are simple moving averages and exponential moving averages.