Simple Moving Average Technical Indicator
Description
The simple moving average, as its name implies, is the simplest moving average to calculate. First, you determine the length of the moving average, or how many data points to include in the moving average. Let's say you want to produce a 10 day close simple moving average. After today is done, take the last 10 days of closes, add them together, divide by 10, and you have your moving average. You can do this on any chart using whatever data you want.
People do tend to use multiple moving averages to represent short term, medium term, and long term. For example longer term investors like to use the 20 day, 50 day, and 200 day simple moving averages to determine what stock prices are doing from a technical point of view. day traders may be using 15min, 60min, and 4 hour simple moving averages to get a technical picture of their stock. Scalpers may use 1 min, 5 min and 15 min moving averages. What your trading strategy and hold times are will determine which moving averages you should probably be using.