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Simple Moving Average
Posted By: TradersLog
A Simple Moving Average (SMA) is calculated by adding the closing price of a security for a number of time periods and then dividing this total by the number of time periods. This illustrates the average price of the issue over a set number of periods. The moving average smooths the data series and makes it easier to spot trends. See also: Exponential Moving Average
Related Articles: Understanding Moving Averages
Chart courtesy of Prophet Financial Systems (www.prophet.net)
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