A moving average (MA) is a statistical method used in finance and technical analysis to smooth out short-term fluctuations in data and highlight longer-term trends. It is calculated by taking the average of a certain number of past data points, typically a set number of days or periods for a stock price or other financial indicator. The moving average is then plotted on a chart along with the actual data, providing a visual representation of the underlying trend. There are several different types of moving averages, including simple moving averages (SMA), exponential moving averages (EMA), and weighted moving averages (WMA), each with their own calculation methods and usage. Moving averages are commonly used by traders and investors to help identify trends, make investment decisions, and set stop-loss orders.
