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The document discusses different types of moving averages used in charting stock prices. A simple moving average (SMA) calculates the average price over a period of time, such as 10 days, for each date on the chart. A triangular moving average (TMA) performs an additional layer of smoothing by calculating the simple moving average of all the SMAs previously calculated, providing a double smoothed view of the overall price trends.

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42 views1 page

Sample Import Document

The document discusses different types of moving averages used in charting stock prices. A simple moving average (SMA) calculates the average price over a period of time, such as 10 days, for each date on the chart. A triangular moving average (TMA) performs an additional layer of smoothing by calculating the simple moving average of all the SMAs previously calculated, providing a double smoothed view of the overall price trends.

Uploaded by

a7451t
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as RTF, PDF, TXT or read online on Scribd
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Charting: Moving Averages

Below is an example of the simple moving average (SMA) trend line for a set of stock prices.

As its name suggests: a simple moving average. The chart calculates the average price over a period of time (here, 10 days) for each date. So for day 10, the average for days 1 through 10 is calculated, for day 11 you use days 2 to 11, and so on. Pretty easy.

Next up is the triangular moving average (TMA).

If you describe the SMA as a smoothing operation on prices, so that overall trends can more easily be seen (rather than the spiky day by day prices), you could describe a TMA as a double smoothing operation. Here the chart calculates the simple moving average of all the SMAs previously calculated.

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