The market is crowded with a lot of “noise” that you’ll have to sift through when you want to make savvy and strategic investments. One of the standard trend indicators to help you do precisely that is called a Moving Average (MA).
A Moving Average is a big piece of the puzzle when it comes to technical analysis, allowing you to better “smooth out” the action on pricings of a particular stock or asset. A Moving Average is sometimes called a trend-following or trend lagging indicator because it looks at the past prices and values of a security (and the moving average of those values over time) to give you an idea of what the future may hold.
Simple Moving Average (SMA) calculations are the (no surprise here) simple average of specific securities over a particular amount of time. An Exponential Moving Average (EMA) gives a higher priority to more recent prices than SMA.