Simple moving average (SMA)
The plain average of the last N prices.
Formula
SMA = (P₁ + P₂ + … + Pₙ) ÷ N
How to read it
Price above a rising SMA is an uptrend by the most common definition; the 50- and 200-day averages are the levels most often watched.
How to use it
Smooths noise to show direction. Two averages crossing (a fast over a slow) is the classic trend signal.
Limitations
Lags by about half its length, and every price in the window counts equally, so an old price leaving the window can move it.
In Kereon
Charts · Superchart. Default length 50 on the close, with an optional offset.
Also called: moving average, ma, simple average.