Simple Moving Average

Simple Moving Average

the simple moving average is formed by calculating the average price of a security over a particular number of periods.

While it is possible to create moving averages from the Open, the High and the Low data points, most moving averages are created using the closing price.

For example: a 4-day simple moving average is calculated by adding the closing prices for the last 4 days and dividing the total by 4.

11+ 12 + 13 + 14 = 50

(50 / 4) = 12.5

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