What is a 'Simple Moving Average  SMA'
A simple moving average (SMA) is a simple, or arithmetic, moving average that is calculated by adding the closing price of the security for a number of time periods and then dividing this total by the number of time periods. Shortterm averages respond quickly to changes in the price of the underlying, while longterm averages are slow to react.
BREAKING DOWN 'Simple Moving Average  SMA'
In other words, this is the average stock price over a certain period of time. Keep in mind that equal weighting is given to each daily price. As shown in the chart above, many traders watch for shortterm averages to cross above longerterm averages to signal the beginning of an uptrend. As shown by the blue arrows, shortterm averages (e.g. 15period SMA) act as levels of support when the price experiences a pullback. Support levels become stronger and more significant as the number of time periods used in the calculations increases.
Generally, when you hear the term "moving average", it is in reference to a simple moving average. This can be important, especially when comparing to an exponential moving average (EMA).
To learn more about moving averages, check out What's the difference between moving average and weighted moving average?

Linearly Weighted Moving Average
A type of moving average that assigns a higher weighting to recent ... 
Moving Average Ribbon
A technique used in technical analysis to identify changing trends. ... 
Exponential Moving Average  EMA
A type of moving average that is similar to a simple moving average, ... 
Guppy Multiple Moving Average  ...
An indicator used in technical analysis to identify changing ... 
Average Price
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Trading
Simple Moving Averages Make Trends Stand Out
The moving average is easy to calculate and, once plotted on a chart, is a powerful visual trendspotting tool. 
Investing
How To Use A Moving Average To Buy Stocks
The Moving Average indicator is one of the most useful tools for trading and analyzing financial markets. 
Trading
Use Moving Averages to Buy Stocks
A moving average constantly updates a stock's average price, but it cannot predict a stock's performance. 
Trading
Do Adaptive Moving Averages Lead To Better Results?
These complex indicators can help traders interpret trend changes, but are they too good to be true? 
ETFs & Mutual Funds
Using Moving Averages to Buy ETFs
Learn how to use moving averages to enter and exit trades in ETFs, and understand some popular technical setups using moving averages. 
Trading
Simple Vs. Exponential Moving Averages
These technical indicators help investors to visualize trends by smoothing out price movements. 
Trading
The 7 Pitfalls Of Moving Averages
While moving averages can be a valuable tool, they are not without risk. Discover the pitalls and how to avoid them. 
Managing Wealth
Adjusting Strategies to Moving Average Slopes
Managing interrelationships between price, moving averages and slope can shift the reward: risk equation in your favor. 
Trading
Weighted Moving Averages: The Basics
We take a closer look at the linearly weighted moving average and the exponentially smoothed moving average. 
Markets
What's a Death Cross?
A death cross is seen when the shortterm moving average of a security or index falls below its longterm moving average.

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What are the main advantages of using Moving Averages (MA)?
See why moving averages have proven to be advantageous for traders and analysts and useful when applied to price charts and ... Read Answer >>