Simple Moving Averages Financial Glossary

What is it? A simple moving average is used to spot a possible underlying trend in the stock price. Moving averages are calculated by adding values over a set number of periods and then dividing the sum by the total number of values. Simple moving averages smooth the data by removing noise over the selected period. The ability to smooth data makes this a useful tool in identifying price trends and trend reversals.

Finance Term Definition Added By: Brayden

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