Moving Average

A moving average is a technical analysis indicator that smooths out price data by calculating the average price of a security over a specific time period. Moving averages are commonly used to identify trends and potential buy or sell signals in financial markets. There are different types of moving averages, including simple moving averages (SMA) and exponential moving averages (EMA), with the latter giving more weight to recent price data.

Example

A trader uses a 50-day moving average to track the average price of a stock, looking for a bullish signal when the stock price crosses above the moving average.