Moving Average
Moving averages are a popular technical indicator used to show the underlying trend in a price series.
The most basic moving average is the simple moving average or (SMA or often just MA). The simple moving average is calculated by taking them sum of closing prices over a specific time period (days, hours, minutes) and dividing that sum by the number of periods.
For example, a 5-day simple moving average (or 5-day moving average), would be calculated by adding the closing prices over the past five days, and then dividing that sum by 5.
Below is an example of a 5-day moving average on a price chart.
Learn more about moving averages at Wikipedia here.
Go deeper. Read about moving averages here.
Technical Analysis of Stock Trends by Robert D. Edwards and John Magee
