The average market price of an asset over a certain period is known as a Simple Moving Average. It is referred to as the ‘moving’ average since it is plotted on a chart bar by bar and forms a line that moves along the chart as the average price changes.
The SMA is calculated by adding the price of a security over a period and then dividing that figure by the number of periods.
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The average market price of an asset over a certain period is known as a Simple Moving Average. It is referred to as the ‘moving’ average since it is plotted on a chart bar by bar and forms a line that moves along the chart as the average price changes. The SMA is calculated by adding the price of a security over a period and then dividing that figure by the number of periods.