Simple Moving Average Indicator

What is Simple Moving Average (SMA) Indicator?

Moving averages are one of the core indicators in technical analysis, and there are a variety of different versions. SMA is the easiest moving average to construct. It is simply the average price over the specified period. The average is called "moving" because it is plotted on the chart bar by bar, forming a line that moves along the chart as the average value changes. In trading practice commonly uses a combination of moving averages, combined together to the one group. This group then uses to determine a trend.

Most useful cases

  • Trend following - group of SMA allows you to determing a new wave of trend or correction. Also it gives you information about the strenght of current trend wave, to do it trader needs to look at the distance between every SMA

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