What Is Moving Average? Meaning & Example
Definition
A moving average is the average price over a set number of past periods, updated as new data arrives. It smooths out noise to help show trend direction.
Related terms
A trend is the general direction in which a price is moving over time. Uptrends make higher highs and higher lows, while downtrends make lower highs and lower lows.
Technical AnalysisTechnical analysis studies price charts, volume and indicators to look for patterns and trends. It focuses on market behavior rather than company finances.
SupportSupport is a price area where buying interest has tended to stop declines. Traders watch support levels for potential bounces or breakdowns.
What is Moving Average?
A moving average is the average price over a set number of past periods, updated as new data arrives. It smooths out noise to help show trend direction.
Can you give an example of Moving Average?
A 50-day moving average averages the last 50 closing prices and rises when prices trend up.