JoymistaWhat Is a Moving Average (SMA and EMA)?
A moving average is the average closing price over a set number of candles, updated each candle. The simple SMA weighs all prices equally; the exponential EMA gives recent prices more weight.
Explained
Moving averages show the trend and smooth out noise: price above a rising average points to an uptrend. Because it is built from past prices it always lags, and an EMA reacts faster than an SMA of the same length.
Example
Example with made-up numbersThe last 5 closes are 10, 11, 12, 13 and 14, so the 5-period SMA is (10 + 11 + 12 + 13 + 14) ÷ 5 = 12.
Use it in Joymista
Related terms
- Golden Cross and Death CrossA golden cross is a short moving average (usually the 50) crossing above a long one…
- MACDMACD is a momentum and trend indicator: its line is the 12-period EMA minus the 26-period…
- Bollinger BandsBollinger Bands are three lines: a simple moving average (usually 20) with two bands set…
Put it to work in Joymista
Signing up is free, some tools are free, and one subscription unlocks the rest.
Open in JoymistaEducational content, not investment advice.