What is a moving average (MA)?

A moving average (MA) is a stock indicator that is commonly used in technical analysis. The reason for calculating the moving average of a stock is to help smooth out the price data over a specified period of time by creating a constantly updated average price. A simple moving average (SMA) is a calculation that takes the arithmetic mean ...

How do you know if a moving average is up or down?

As a general guideline, if the price is above a moving average, the trend is up. If the price is below a moving average, the trend is down. However, moving averages can have different lengths (discussed shortly), so one MA may indicate an uptrend while another MA indicates a downtrend. Types of Moving Averages

What is a cumulative moving average?

Cumulative moving average. In a cumulative moving average (CMA), the data arrive in an ordered datum stream, and the user would like to get the average of all of the data up until the current datum point. For example, an investor may want the average price of all of the stock transactions for a particular stock up until the current time.

What is a moving average in signal processing?

Moving average. Mathematically, a moving average is a type of convolution and so it can be viewed as an example of a low-pass filter used in signal processing. When used with non-time series data, a moving average filters higher frequency components without any specific connection to time, although typically some kind of ordering is implied.