Simple Moving Average (SMA)

Description

SMA stands for simple moving average. It helps to smooth the price curve for better trend identification. The longer the SMA period selected, the smoother the curve.

Formula

An n–period SMA is simply the sum of the last n period’s closing prices divided by n.

5 period SMA = (Price1 + Price2 + Price3 + Price4 + Price5) / 5

This is for general information purposes only - Examples shown are for illustrative purposes and may not reflect current prices from OANDA. It is not investment advice or an inducement to trade. Past history is not an indication of future performance.

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