Moving Average
The average price of an asset over a set number of recent periods, recalculated each period so the line 'moves' through time.
A moving average smooths jagged price data into a single line, making the underlying trend easier to see. A simple moving average (SMA) weights every period equally; an exponential moving average (EMA) weights recent prices more heavily.
Like all technical indicators, a moving average is lagging — it is built from past prices and confirms a move after it has begun. It describes the trend; it does not predict it.
Key points
- Smooths price into a readable trend line.
- SMA weights equally; EMA favours recent prices.
- A lagging indicator — educational, not a signal.