Education - Moving Averages

A simple moving average (SMA )is an arithmetic moving average calculated by adding recent closing prices and then dividing that by the number of time periods in the calculation average. A simple, or arithmetic, moving average that is calculated by adding the closing price of the security for a number of time periods and then dividing this total by that same number of periods. Short-term averages respond quickly to changes in the price of the underlying, while long-term averages are slow to react.

Read more: Simple Moving Average (SMA) investopedia.com/terms/s/sma.asp
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