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The simple moving average (sma), which is the simple average of a security over a defined number of time periods, & the exponential moving average (ema), which gives higher weight to more recent prices.
Moving average is a succession of averages derived from successive segments of a series of values.
A simple moving average is formed by compounding the average price of a security over a specific number of periods
Mean of time series data (observations equally spaced in time) from several consecutive periods. Called ‘moving’ because it is continually recomputed as new data becomes available, it progresses by dropping the earliest value and adding the latest value.
For Example:-
The moving average of six-month sales may be computed by taking the average of sales from January to June, then the average of sales from February to July, then of March to August, and so on.
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