Finance Dictionary
Moving Average
The average price of a security over a rolling number of periods, used to smooth short-term noise and show trend direction. A simple moving average weights every period equally; an exponential one weights recent prices more heavily.
Formula
SMA = Sum of closing prices over n periods ÷ n
Example
When the 50-day moving average crosses above the 200-day, technical analysts call it a golden cross and read it as bullish.
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