Moving average
Also called: SMA, EMA, simple moving average, exponential moving average, golden cross, death cross, moving average crossover
The average closing price over the last N periods, recalculated each period, used to smooth price movements and describe trends.
A simple moving average weights each price equally; an exponential moving average gives more weight to recent prices. Every moving average lags the price, longer periods more so. Crossovers confirm moves that have already happened and whipsaw in sideways markets.
Example
Closes of ₹100, ₹104, ₹102, ₹106 and ₹108 give a five-day simple moving average of ₹104.
Learn more in these lessons
- Moving averagesHow are moving averages calculated, and what do they really tell you?
- MACDHow does MACD work, and are its crossovers early signals?
- Volume-weighted average price (VWAP)What is VWAP, and how should you use it?
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