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Simple Moving Average
A simple moving average (SMA) is the average price of a security over a specific period of time. Most moving averages are based on closing price. A 5-day simple moving average is the sum of closing prices of five days divided by five.
An example for calculating the simple moving average is as follows:
Let us assume a time period window of 10 for an SMA,
n = 10:
| Sr. No | Data | Simple Moving Average (SMA) | Data points used |
| 1 | 20 | -na- | |
| 2 | 25 | -na- | |
| 3 | 29 | -na- | |
| 4 | 12 | -na- | |
| 5 | 29 | -na- | |
| 6 | 35 | -na- | |
| 7 | 15 | -na- | |
| 8 | 10 | -na- | |
| 9 | 9 | -na- | |
| 10 | 15 | 19.9 | Simple average from data point 1 to data point 10 |
| 11 | 26 | 20.5 | Simple average from data point 2 to data point 11 |
| 12 | 35 | 21.5 | Simple average from data point 3 to data point 12 |
| 13 | 9 | 19.5 | Simple average from data point 4 to data point 13 |
| 14 | 45 | 22.8 | Simple average from data point 5 to data point 14 |
| 15 | 60 | 25.9 | Simple average from data point 6 to data point 15 |
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