![]() ![]() Here the latest price gets the maximum importance or weightage. While calculating SMA, we have seen that equal weightage is given to individual price. Weighted Moving Average(WMA) concentrate more on recent price action and like SMA it is also plotted directly on the security price. Sometimes technical traders feel that only closing or opening price is not enough for calculating a moving average and this was one of the most important reasons behind the introduction of Weighted Moving Average indicator. For Medium term 20,34,50 and for longer term 100,200 can be used. Learn in 2 hours – Magic of Moving Averagesįor shorter-term SMA, we can use 5,9,13 etc. As per the choice of the trader, the periods can be changed in the SMA indicator. SMA is a Technical indicator which is represented by a line and it is directly plotted on the security price. Simple Moving Average indicator or SMA is a moving average which is calculated by adding the closing price of security prices for the last n-periods and dividing it by the total number of time periods.įor example, suppose we want to calculate the 9 periods SMA of a security price.įirst, we will add the last 9 Days closing price of the security and then it will be divided by the 9 periods. There are different types of moving average present in the field of technical analysis let’s discuss one by one. ![]() How do 50-day, 100-day, and 200-day moving averages differ? The indicator not only helps a trader to understand the market situation it also helps to take better trading decisions. In this article, we will discuss moving average indicator. To get a better picture of the market traders uses different types of indicators and oscillators like moving average indicator, Relative Strength Index(RSI), Stochastic etc. But while trading with the help of technical analysis only price is not enough to understand the market sentiment. In technical analysis price is everything.
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