4.2 Trend-following indicator
Moving averages are used to determine the direction of trend and are basis of many trend following systems. Moving averages smooth out a data series and make it easier to identify the direction of the trend. Instead of predicting a change in trend, moving averages follow behind the current trend because past price data is used to form moving averages, they are considered lagging or trend following. Therefore, you can use moving averages for trend identification and trend following purposes, not for prediction.