Charts & technicals
What is Moving average (SMA and EMA)?
Also called: SMA, EMA, DMA, Simple moving average, Exponential moving average
Hinglish mein padhein: Moving average kya hota hai?
A moving average is the average closing price over the last N days, updated daily. It smooths noise to show the trend.
A simple moving average (SMA) weights every day equally; an exponential moving average (EMA) gives more weight to recent prices, so it reacts faster.
The 50-day and 200-day averages are the most watched. Price above a rising 200-day average is a common definition of a long-term uptrend.
Example
If the last five closes are 100, 102, 101, 104 and 103, the 5-day SMA is 102.
Related terms
- Golden cross and death crossA golden cross happens when the 50-day moving average crosses above the 200-day; a death cross is the opposite. Both are slow trend signals.
- SupertrendSupertrend is a trend-following line built from the Average True Range. Price above the line is an up phase; below it, a down phase.
- TrendA trend is the general direction of price: an uptrend makes higher highs and higher lows, a downtrend lower highs and lower lows.