What is a 200-day SMA?

As a very long-term moving average, the 200-day SMA is often used in conjunction with other, shorter-term moving averages to show not only the market trend but also to assess the strength of the trend as indicated by the separation between moving average lines. For example, comparing the 50-day SMA and 200-day is relatively common.

Is 200 SMA a trend indicator?

This article explains 200 SMA as a trend indicator and its combination with 50 SMA. SMA stands for Simple Moving Average which is utilized as a trend indicator and also to pinpoint support and resistance levels. Essentially, the Simple Moving Average (SMA) is defined as the average price over a particular set of time periods.

Can sma-200 be used as a reference point?

Many traders are using the Moving Average as a reference point before deciding an open position. Aside from being used as a support resistance level, trend indicator, and trend filter, SMA-200 can also be combined with another Moving Average line.

What is a simple moving average (SMA)?

A simple moving average (SMA) takes the average closing prices of a security over a certain period of time. It is used to smooth out price swings and provide better insight into trends and reversals. How Can I Find the 200-Day Moving Average for a Stock?