Term:SIMPLE MOVING AVERAGE [SMA]

The arithmetic mean or average of a series of prices over a period of time. The longer the period of time studied (that is, the larger the denominator of the average), the less impact each individual data point has on the average. Moving averages of various types are used by technicians to smooth out “noise” within a chart and to give clear signals of a change in the direction of the trend. Read more about moving averages in modules 22 and 23 of the PDSnet Online Investment Course.

mod-22-simple-moving-average

Standard Bank Simple Moving Average – Chart by ShareFriend Pro

Disclaimer - All information and data contained within the PDSnet Glossary terms is for informational and educational purposes only. PDSnet makes no representations as to the accuracy, completeness, suitability, or validity, of any information, and shall not be liable for any errors, omissions, or any losses, injuries, or damages arising from its display or use. Information in the PDSnet glossary terms is based on the author’s opinion and experience and should not be considered professional financial investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Thoughts and opinions will also change from time to time as more information is accumulated. PDSnet reserves the right to delete any glossary term for any reason.« Back to Glossary Index