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1. Shard Calculation

Query:

Response:

Calculated Shard: 106 (from laksa101)

2. Crawled Status Check

Query:

curl -X POST \
  'http://laksa106.int.ahrefs:8124/' \
  -H 'Content-Type: text/plain' \
  -H 'X-ClickHouse-Database: crawler3' \
  -H 'Authorization: Basic YXBpOg==' \
  -d 'SELECT getAhrefsURLFromUnparsed(src_unparsed) AS found_url, ifNull(toUnixTimestamp(download_stamp), 0) AS crawl_time, ifNull(toUnixTimestamp(props_url_first_seen), 0) AS first_indexed_time, download_http_code AS http_code, src_unparsed AS src_unparsed, src_root_hash AS src_root_hash, history_drop_reason AS history_drop_reason, meta_title AS meta_title, meta_descriptions AS meta_descriptions, attrs_boilerpipe_text AS attrs_boilerpipe_text, attrs_markdown AS attrs_markdown, attrs_readable_markdown AS attrs_readable_markdown, meta_canonical AS meta_canonical FROM crawler3.page_info_local FINAL PREWHERE (src_root_hash, src_unparsed) IN ((getAhrefsRootHashFromUnparsed(getAhrefsUnparsedNoserviceFromURL(\'https://www.thebalancemoney.com/simple-exponential-and-weighted-moving-averages-1031196\')), getAhrefsUnparsedNoserviceFromURL(\'https://www.thebalancemoney.com/simple-exponential-and-weighted-moving-averages-1031196\'))) FORMAT JSONEachRow'

Response:

{"found_url":"https:\/\/www.thebalancemoney.com\/simple-exponential-and-weighted-moving-averages-1031196","crawl_time":1776685493,"first_indexed_time":1662712427,"http_code":200,"src_unparsed":"com,thebalancemoney!www,\/simple-exponential-and-weighted-moving-averages-1031196 s443","src_root_hash":"4422461024219680306","history_drop_reason":null,"meta_title":"Simple, Exponential, and Weighted Moving Averages","meta_descriptions":["Learn about simple, exponential and weighted moving averages, including definitions, calculations, and their basic uses and interpretations in trading."],"attrs_boilerpipe_text":"Moving averages act as technical indicators that show the average price movement over a certain period. They are often used to help highlight\ntrends\n, spot trend reversals, and provide trade signals.\nThere are several different types of moving averages. They each create a line on a chart that can help show you which direction a price is moving.\nLearn the different types of averages used by traders and what they tell you about a price.\nSimple Moving Average Calculation\nThe\nsimple moving average (SMA)\ncalculates an average of the last\nn\nprices, where P\nx\nrepresents the price in a period, and\nn\nrepresents the number of periods. The average \"moves\" because you are not using all of the data, only recent periods:\nFor example, a four-period SMA with prices of 1.2640, 1.2641, 1.2642, and 1.2641 gives a moving average of 1.2641 using the calculation (1.2640 + 1.2641 + 1.2642 + 1.2641) \/ 4 = 1.2641.\nWhile knowing how to calculate a simple average is a good skill to have,\ntrading and chart platforms\nfigure it out for you. You select the SMA indicator from the list of charting indicators and apply it to the chart. Then you adjust the number of periods you want to use.\nYou typically make adjustments to the indicators in the Settings\nmenu section of a trading platform.\nNote\nOn many platforms, you can locate the settings by double-clicking on the indicator itself.\nThe advantage of an SMA is that you know what you are getting. The SMA value equals the average price for the number of periods in the SMA calculation.\nTraders commonly used eight, 20, 50, 100, and 200 periods for an SMA. For example, if using a 100-period SMA, the current value of the SMA on the chart is the average price over the last 100 periods or price bars.\nSome charts include the SMA, along with an exponential moving average (EMA). They can also have a weighted moving average (WMA) on a one-minute stock chart. Due to their different calculations, the indicators appear at different price levels on the chart.\nExponential Moving Average Calculation\nThe exponential moving average (EMA) is a weighted average of recent period's prices. It uses an exponentially decreasing weight from each previous price\/period. In other words, the formula gives recent prices more weight than past prices.\nFor example, a four-period EMA has prices of 1.5554, 1.5555, 1.5558, and 1.5560. The last value is the most recent and gives a current EMA value of 1.5558.\nThe EMA adapts more quickly to price changes than the SMA does. For example, when a price reverses direction, the EMA will reverse direction more quickly than the SMA will, because the EMA formula gives more weight to recent prices and less weight to prices from the past.\nNote\nAs with the SMA, charting platforms do all of the EMA calculations for you. Select the EMA from the indicator list on a charting platform, and apply it to your chart. Go into the settings, and adjust how many periods the indicator should calculate, such as 15, 50, or 100.\nWeighted Moving Average Calculation\nThe weighted moving average (WMA) gives you a weighted average of recent prices, where the weighting\ndecreases\nwith each previous price. This works similarly to the EMA, but you calculate the WMA differently.\nWMAs can have different weights assigned based on the number of periods used in the calculation. If you want a weighted moving average of four different prices, then the most recent weighting could be 4 to 10. The previous period could weigh 3 to 10. The third period could have a weighting of 2 to 10.\nA weight of 4 to 10, for example, means that you have 10 recent periods and their prices. You choose the four most recent prices. This accounts for 40% of the value of the WMA. The price four periods ago only accounts for 10% of the WMA value.\nFor the following example, assume prices of 90, 89, 88, 89, with the most recent price first. You would calculate this as [90 x (4\/10)] + [89 x (3\/10)] + [88 x (2\/10)] + [89 x (1\/10)] = 36 + 26.7 + 17.6 + 8.9 = 89.2\nNote\nYou can customize the weighted moving average more than the SMA and EMA. The most recent price points are usually given more weight. It could also work the other way, where you give historical prices more weight.\nMoving Average Trading Uses and Interpretation\nYou can use moving averages for both analysis and trading signals. For analysis, all of the moving averages help highlight the trend. When the price is above its moving average, it shows that the price is trading higher than it has, on average, over the period being analyzed. That helps to confirm an uptrend. When the price sits below its moving average, the price is trading lower on average than it has over the period being analyzed. That helps to confirm a\ndowntrend\n.\nWhen the price crosses above its moving average, it is getting stronger relative to where it was in the past, because the most recent price now sits higher than the average. If the price crosses below its moving average, it is getting weaker relative to where it was in the past.\nOne longer-term and one shorter-term moving average—for example, 20 and 50 periods—can be added to a chart simultaneously. When the 20-period moving average crosses above the 50 line, it indicates that short-term price momentum is moving to the upside. When the 20-period moving average crosses below the 50 line, it suggests that the short-term price momentum is moving to the downside.\nNote\nMoving averages can also be incorporated with other indicators to provide trade signals.\nAn EMA can provide buy signals when combined with\nKeltner Channels\n, an indicator with a high, average, and low price that creates a \"channel\" on a chart. A strategy may include buying near the EMA when the trend is up, and the price is pulling back from the top of the Keltner Channel.\nOne type of moving average isn't inherently better than others; they calculate the average price differently. Depending on the strategy you’re using, one kind of moving average may work better than another. Try out different moving average combinations, and see which provides you with the best results.\nYou may find that, for each market, you need to adjust your settings slightly. A 50-period SMA may provide great signals on one stock, for example, but not on another. A 20-period EMA may help isolate the trend on one\nfutures contract\nbut not another. All of the moving averages are just tools, and interpreting them is up to the trader, because no indicator works well all the time or in all market conditions.\nFrequently Asked Questions\nMoving averages are a technical indicator, so look for the button that lets you add indicators. This may be in a settings menu, or it may be its own button. From there, you can choose between simple, exponential, and weighted moving averages. Once the moving average is added to the chart, you can alter the number of periods, whether it uses the close or the low of the day, and other factors along these lines.\nSwing traders\noften use a mix of short-term and mid-term moving averages. For instance, a trader may use an 8-day, 24-day, and 50-day moving average. Other traders may use a 6-month moving average or more, in addition to a shorter-term moving average.","attrs_markdown":"\n\n[Skip to content](https:\/\/www.thebalancemoney.com\/simple-exponential-and-weighted-moving-averages-1031196#main)\n\n[The Balance](https:\/\/www.thebalancemoney.com\/)\n\n- Please fill out this field.\n\nPlease fill out this field.\n\n- [Budgeting](https:\/\/www.thebalancemoney.com\/budgeting-4074043)\n  Budgeting\n  \n  - [Budgeting Basics](https:\/\/www.thebalancemoney.com\/how-to-make-a-budget-1289587)\n  - [Financial Planning](https:\/\/www.thebalancemoney.com\/financial-planning-4074022)\n  - [Managing Your Debt](https:\/\/www.thebalancemoney.com\/managing-your-debt-4073740)\n  - [Budgeting Software](https:\/\/www.thebalancemoney.com\/tips-for-choosing-budget-software-1293610)\n  - [View All](https:\/\/www.thebalancemoney.com\/budgeting-4074043)\n- [Investing](https:\/\/www.thebalancemoney.com\/investing-4072978)\n  Investing\n  \n  - [Find an Advisor](https:\/\/www.thebalancemoney.com\/find-qualified-advisors-4073748)\n  - 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[Taxes](https:\/\/www.thebalancemoney.com\/taxes-4073970)\n  - [Credit Reports & Scores](https:\/\/www.thebalancemoney.com\/credit-reports-and-scores-4073406)\n  - [Loans](https:\/\/www.thebalancemoney.com\/loans-4073271)\n\n[About Us](https:\/\/www.thebalancemoney.com\/about-us-5104704)\n\n- [The Balance Financial Review Board](https:\/\/www.thebalancemoney.com\/the-balance-financial-review-board-4783604)\n\n# Simple, Exponential, and Weighted Moving Averages\nDay Trading Uses and Applications of Moving Averages\n\nBy [Adam Milton](https:\/\/www.thebalancemoney.com\/adam-milton-bio-1030828)\n\nUpdated on June 18, 2021\n\nFact checked by\n\n[Emily Ernsberger](https:\/\/www.thebalancemoney.com\/emily-ernsberger-5188217)\n\n![Emily Ernsberger headshot]()\n\n![Emily Ernsberger headshot](https:\/\/www.thebalancemoney.com\/thmb\/Bc9yzBSMDo6ztezxetAKF_4HW0g=\/200x200\/filters:no_upscale\\(\\):max_bytes\\(150000\\):strip_icc\\(\\)\/IMG_1820-9fadd7a5f908410880684c93745fe0ed.jpg)\n\nFact checked by [Emily Ernsberger](https:\/\/www.thebalancemoney.com\/emily-ernsberger-5188217)\n\nEmily Ernsberger is a fact-checker and an award-winning journalist with more than five years of experience covering local governments.\n\n[brand's fact checking process](https:\/\/www.thebalancemoney.com\/about-us-5104704#toc-editorial-guidelines)\n\nIn This Article\n\nView All\n\nIn This Article\n\n- [Simple Moving Average Calculation](https:\/\/www.thebalancemoney.com\/simple-exponential-and-weighted-moving-averages-1031196#toc-simple-moving-average-calculation)\n- [Exponential Moving Average Calculation](https:\/\/www.thebalancemoney.com\/simple-exponential-and-weighted-moving-averages-1031196#toc-exponential-moving-average-calculation)\n- [Weighted Moving Average Calculation](https:\/\/www.thebalancemoney.com\/simple-exponential-and-weighted-moving-averages-1031196#toc-weighted-moving-average-calculation)\n- [Moving Average Trading Uses and Interpretation](https:\/\/www.thebalancemoney.com\/simple-exponential-and-weighted-moving-averages-1031196#toc-moving-average-trading-uses-and-interpretation)\n- [Frequently Asked Questions](https:\/\/www.thebalancemoney.com\/simple-exponential-and-weighted-moving-averages-1031196#toc-faq-fdac6fa1-b614-4903-be12-cc047e4ff721)\n\nClose\n\n![example of sma, ema, and wma on price chart](https:\/\/www.thebalancemoney.com\/thmb\/XdJIgXrNrQwJYawJWByt2wcv5pM=\/1500x0\/filters:no_upscale\\(\\):max_bytes\\(150000\\):strip_icc\\(\\)\/smaemaandwma-59d66ba6d963ac0010f68371.jpg)\n\n![example of sma, ema, and wma on price chart](https:\/\/www.thebalancemoney.com\/thmb\/XdJIgXrNrQwJYawJWByt2wcv5pM=\/1500x0\/filters:no_upscale\\(\\):max_bytes\\(150000\\):strip_icc\\(\\)\/smaemaandwma-59d66ba6d963ac0010f68371.jpg)\n\nCredit: TradingView.com\n\nMoving averages act as technical indicators that show the average price movement over a certain period. They are often used to help highlight [trends](https:\/\/www.thebalancemoney.com\/trend-following-in-commodities-trading-809367), spot trend reversals, and provide trade signals.\n\nThere are several different types of moving averages. They each create a line on a chart that can help show you which direction a price is moving.\n\nLearn the different types of averages used by traders and what they tell you about a price.\n\n## Simple Moving Average Calculation\nThe [simple moving average (SMA)](https:\/\/www.thebalancemoney.com\/what-is-a-simple-moving-average-5207024) calculates an average of the last *n* prices, where Px represents the price in a period, and *n* represents the number of periods. The average \"moves\" because you are not using all of the data, only recent periods:\n\n![Simple Moving Average]()\n\n![Simple Moving Average](https:\/\/www.thebalancemoney.com\/thmb\/7mHK62twRpMKP55Y1rJrHaiaGUM=\/1500x0\/filters:no_upscale\\(\\):max_bytes\\(150000\\):strip_icc\\(\\)\/SMA-f19ef44569874d9ba635cd2e85a3343e.jpg)\n\nFor example, a four-period SMA with prices of 1.2640, 1.2641, 1.2642, and 1.2641 gives a moving average of 1.2641 using the calculation (1.2640 + 1.2641 + 1.2642 + 1.2641) \/ 4 = 1.2641.\n\nWhile knowing how to calculate a simple average is a good skill to have, [trading and chart platforms](https:\/\/www.thebalancemoney.com\/tools-and-services-needed-for-day-trading-1031037) figure it out for you. You select the SMA indicator from the list of charting indicators and apply it to the chart. Then you adjust the number of periods you want to use.\n\nYou typically make adjustments to the indicators in the Settingsmenu section of a trading platform.\n\n### Note\nOn many platforms, you can locate the settings by double-clicking on the indicator itself.\n\nThe advantage of an SMA is that you know what you are getting. The SMA value equals the average price for the number of periods in the SMA calculation.\n\nTraders commonly used eight, 20, 50, 100, and 200 periods for an SMA. For example, if using a 100-period SMA, the current value of the SMA on the chart is the average price over the last 100 periods or price bars.\n\nSome charts include the SMA, along with an exponential moving average (EMA). They can also have a weighted moving average (WMA) on a one-minute stock chart. Due to their different calculations, the indicators appear at different price levels on the chart.\n\n## Exponential Moving Average Calculation\nThe exponential moving average (EMA) is a weighted average of recent period's prices. It uses an exponentially decreasing weight from each previous price\/period. In other words, the formula gives recent prices more weight than past prices.\n\n![Exponential Moving Average]()\n\n![Exponential Moving Average](https:\/\/www.thebalancemoney.com\/thmb\/6IneEiyZMGnDVws0WcKm04xrIto=\/1500x0\/filters:no_upscale\\(\\):max_bytes\\(150000\\):strip_icc\\(\\)\/EMA-a566789cf300425c80352fb70a6c0666.jpg)\n\nFor example, a four-period EMA has prices of 1.5554, 1.5555, 1.5558, and 1.5560. The last value is the most recent and gives a current EMA value of 1.5558.\n\nThe EMA adapts more quickly to price changes than the SMA does. For example, when a price reverses direction, the EMA will reverse direction more quickly than the SMA will, because the EMA formula gives more weight to recent prices and less weight to prices from the past.\n\n### Note\nAs with the SMA, charting platforms do all of the EMA calculations for you. Select the EMA from the indicator list on a charting platform, and apply it to your chart. Go into the settings, and adjust how many periods the indicator should calculate, such as 15, 50, or 100.\n## Weighted Moving Average Calculation\nThe weighted moving average (WMA) gives you a weighted average of recent prices, where the weighting *decreases* with each previous price. This works similarly to the EMA, but you calculate the WMA differently.\n\n![Weighted Moving Average]()\n\n![Weighted Moving Average](https:\/\/www.thebalancemoney.com\/thmb\/VrctvaOFqYeUGRZwW3oShEpAv50=\/1500x0\/filters:no_upscale\\(\\):max_bytes\\(150000\\):strip_icc\\(\\)\/WMA-2cada5373e76459a947b8c7fc106f41e.jpg)\n\nWMAs can have different weights assigned based on the number of periods used in the calculation. If you want a weighted moving average of four different prices, then the most recent weighting could be 4 to 10. The previous period could weigh 3 to 10. The third period could have a weighting of 2 to 10.\n\nA weight of 4 to 10, for example, means that you have 10 recent periods and their prices. You choose the four most recent prices. This accounts for 40% of the value of the WMA. The price four periods ago only accounts for 10% of the WMA value.\n\nFor the following example, assume prices of 90, 89, 88, 89, with the most recent price first. You would calculate this as \\[90 x (4\/10)\\] + \\[89 x (3\/10)\\] + \\[88 x (2\/10)\\] + \\[89 x (1\/10)\\] = 36 + 26.7 + 17.6 + 8.9 = 89.2\n\n### Note\nYou can customize the weighted moving average more than the SMA and EMA. The most recent price points are usually given more weight. It could also work the other way, where you give historical prices more weight.\n## Moving Average Trading Uses and Interpretation\nYou can use moving averages for both analysis and trading signals. For analysis, all of the moving averages help highlight the trend. When the price is above its moving average, it shows that the price is trading higher than it has, on average, over the period being analyzed. That helps to confirm an uptrend. When the price sits below its moving average, the price is trading lower on average than it has over the period being analyzed. That helps to confirm a [downtrend](https:\/\/www.thebalancemoney.com\/how-to-spot-and-trade-downtrends-in-any-market-1030886).\n\nWhen the price crosses above its moving average, it is getting stronger relative to where it was in the past, because the most recent price now sits higher than the average. If the price crosses below its moving average, it is getting weaker relative to where it was in the past.\n\nOne longer-term and one shorter-term moving average—for example, 20 and 50 periods—can be added to a chart simultaneously. When the 20-period moving average crosses above the 50 line, it indicates that short-term price momentum is moving to the upside. When the 20-period moving average crosses below the 50 line, it suggests that the short-term price momentum is moving to the downside.\n\n### Note\nMoving averages can also be incorporated with other indicators to provide trade signals.\n\nAn EMA can provide buy signals when combined with [Keltner Channels](https:\/\/www.thebalancemoney.com\/how-to-day-with-trade-keltner-channels-4051613), an indicator with a high, average, and low price that creates a \"channel\" on a chart. A strategy may include buying near the EMA when the trend is up, and the price is pulling back from the top of the Keltner Channel.\n\nOne type of moving average isn't inherently better than others; they calculate the average price differently. Depending on the strategy you’re using, one kind of moving average may work better than another. Try out different moving average combinations, and see which provides you with the best results.\n\nYou may find that, for each market, you need to adjust your settings slightly. A 50-period SMA may provide great signals on one stock, for example, but not on another. A 20-period EMA may help isolate the trend on one [futures contract](https:\/\/www.thebalancemoney.com\/what-are-futures-definition-and-examples-1031172) but not another. All of the moving averages are just tools, and interpreting them is up to the trader, because no indicator works well all the time or in all market conditions.\n\n## Frequently Asked Questions\n- How do you add moving average to a chart?\n  Moving averages are a technical indicator, so look for the button that lets you add indicators. This may be in a settings menu, or it may be its own button. From there, you can choose between simple, exponential, and weighted moving averages. Once the moving average is added to the chart, you can alter the number of periods, whether it uses the close or the low of the day, and other factors along these lines.\n- How should you format moving averages for swing trading?\n  [Swing traders](https:\/\/www.thebalancemoney.com\/day-trading-verus-swing-trading-4134456) often use a mix of short-term and mid-term moving averages. For instance, a trader may use an 8-day, 24-day, and 50-day moving average. Other traders may use a 6-month moving average or more, in addition to a shorter-term moving average.\n\nWas this page helpful?\n\nThanks for your feedback\\!\n\nTell us why\\!\n\nOther\n\nRead More:\n\n- [Investing](https:\/\/www.thebalancemoney.com\/investing-4072978)\n- [Trading](https:\/\/www.thebalancemoney.com\/trading-5085695)\n- [Day Trading](https:\/\/www.thebalancemoney.com\/day-trading-4074032)\n\n## Related Articles\n[![trading with support and resistance]() ![trading with support and resistance](https:\/\/www.thebalancemoney.com\/thmb\/1HZIRk4lQAZqCKWmWS9ilN3WOKQ=\/282x188\/filters:no_upscale\\(\\):max_bytes\\(150000\\):strip_icc\\(\\):focal\\(982x0:984x2\\)\/supportandresistance-5a31d0a7ec2f640037428260.jpg) How to Trade Based on Support and Resistance Levels](https:\/\/www.thebalancemoney.com\/how-to-trade-based-on-support-and-resistance-levels-4043477)\n\n[![Pros and cons of free real-time stock charts. 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phone.](https:\/\/www.thebalancemoney.com\/thmb\/qlkwLhrpdx6hv_SlWJvgP-4BpNM=\/282x188\/filters:no_upscale\\(\\):max_bytes\\(150000\\):strip_icc\\(\\):focal\\(1059x0:1061x2\\)\/GettyImages-1249849699-54321e3fc7e14b4788810ed16504b242.jpg) Applying the Momentum Indicator to Your Trading Strategy](https:\/\/www.thebalancemoney.com\/how-to-trade-with-the-momentum-indicator-1031195)\n\n[![Directional movement index on one minute of a day trading chart.]() ![Directional movement index on one minute of a day trading chart.](https:\/\/www.thebalancemoney.com\/thmb\/N9GLagXh3Gmuy_I90pHfscNCMKY=\/282x188\/filters:no_upscale\\(\\):max_bytes\\(150000\\):strip_icc\\(\\):focal\\(707x0:709x2\\)\/direction-movement-index-on-day-trading-chart-576c0e425f9b5858753ec81b.jpg) How to Trade With the Directional Movement Index (DMI)](https:\/\/www.thebalancemoney.com\/directional-movement-index-dmi-1031185)\n\n[![Traders buying and selling on exchange floor]() ![Traders buying and selling on exchange 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pointing to charts on a a computer monitor](https:\/\/www.thebalancemoney.com\/thmb\/ZVxZj3XMEMUQAof-mwtQIFqvOgw=\/282x188\/filters:no_upscale\\(\\):max_bytes\\(150000\\):strip_icc\\(\\):focal\\(627x0:629x2\\)\/what-you-need-to-know-about-day-trading-57a27e5c5f9b589aa95443e7.jpg) Reading Day-Trading Charts](https:\/\/www.thebalancemoney.com\/day-trading-charts-bar-candlestick-and-line-charts-1031028)\n\n[![Blue financial charts over a digital world map]() ![Blue financial charts over a digital world map](https:\/\/www.thebalancemoney.com\/thmb\/_bb5Q4xObVuaa5w__SUxzS7PQSQ=\/282x188\/filters:no_upscale\\(\\):max_bytes\\(150000\\):strip_icc\\(\\):focal\\(999x0:1001x2\\)\/GettyImages-171573445-5b79d6cac9e77c0025f71281.jpg) Day Trading With Donchian Channels](https:\/\/www.thebalancemoney.com\/day-trading-with-donchian-channels-1031186)\n\n[![Man's finger pointing at bar chart]() ![Man's finger pointing at bar chart](https:\/\/www.thebalancemoney.com\/thmb\/gEqk_bLdrxdmXIPLcpZN4maW7UM=\/282x188\/filters:no_upscale\\(\\):max_bytes\\(150000\\):strip_icc\\(\\):focal\\(1059x0:1061x2\\)\/how-to-read-a-bar-chart-57a0c31e3df78c3276ae83c3.jpg) How to Read a Bar Chart for Day Trading](https:\/\/www.thebalancemoney.com\/read-a-bar-chart-1031114)\n\n[The Balance](https:\/\/www.thebalancemoney.com\/)\n\n## Follow Us\n\n- [Budgeting](https:\/\/www.thebalancemoney.com\/budgeting-4074043)\n- [Investing](https:\/\/www.thebalancemoney.com\/investing-4072978)\n- [Mortgages](https:\/\/www.thebalancemoney.com\/mortgages-home-loans-4073270)\n- [Economics](https:\/\/www.thebalancemoney.com\/us-and-world-economies-5085694)\n- [Banking](https:\/\/www.thebalancemoney.com\/banking-4074049)\n- [Small Business](https:\/\/www.thebalancemoney.com\/small-business-5181174)\n\n- [About Us](https:\/\/www.thebalancemoney.com\/about-us-5104704)\n- [Privacy Policy](https:\/\/www.people.inc\/brands-privacy)\n- [Editorial Guidelines](https:\/\/www.thebalancemoney.com\/about-us-5104704#toc-editorial-guidelines)\n- [Terms of Service](https:\/\/www.people.inc\/brands-termsofservice)\n- [Advertise](https:\/\/www.people.inc\/advertising)\n- [Careers](https:\/\/www.people.inc\/careers)\n- [Contact](https:\/\/www.thebalancemoney.com\/about-us-5104704#toc-contact-us)\n\nThe Balance is part of the [People Inc.](https:\/\/www.people.inc\/) publishing family.\n\nNewsletter Sign Up\n\nNewsletter Sign Up","attrs_readable_markdown":"Moving averages act as technical indicators that show the average price movement over a certain period. They are often used to help highlight [trends](https:\/\/www.thebalancemoney.com\/trend-following-in-commodities-trading-809367), spot trend reversals, and provide trade signals.\n\nThere are several different types of moving averages. They each create a line on a chart that can help show you which direction a price is moving.\n\nLearn the different types of averages used by traders and what they tell you about a price.\n\n## Simple Moving Average Calculation\nThe [simple moving average (SMA)](https:\/\/www.thebalancemoney.com\/what-is-a-simple-moving-average-5207024) calculates an average of the last *n* prices, where Px represents the price in a period, and *n* represents the number of periods. The average \"moves\" because you are not using all of the data, only recent periods:\n\nFor example, a four-period SMA with prices of 1.2640, 1.2641, 1.2642, and 1.2641 gives a moving average of 1.2641 using the calculation (1.2640 + 1.2641 + 1.2642 + 1.2641) \/ 4 = 1.2641.\n\nWhile knowing how to calculate a simple average is a good skill to have, [trading and chart platforms](https:\/\/www.thebalancemoney.com\/tools-and-services-needed-for-day-trading-1031037) figure it out for you. You select the SMA indicator from the list of charting indicators and apply it to the chart. Then you adjust the number of periods you want to use.\n\nYou typically make adjustments to the indicators in the Settingsmenu section of a trading platform.\n\n### Note\nOn many platforms, you can locate the settings by double-clicking on the indicator itself.\n\nThe advantage of an SMA is that you know what you are getting. The SMA value equals the average price for the number of periods in the SMA calculation.\n\nTraders commonly used eight, 20, 50, 100, and 200 periods for an SMA. For example, if using a 100-period SMA, the current value of the SMA on the chart is the average price over the last 100 periods or price bars.\n\nSome charts include the SMA, along with an exponential moving average (EMA). They can also have a weighted moving average (WMA) on a one-minute stock chart. Due to their different calculations, the indicators appear at different price levels on the chart.\n\n## Exponential Moving Average Calculation\nThe exponential moving average (EMA) is a weighted average of recent period's prices. It uses an exponentially decreasing weight from each previous price\/period. In other words, the formula gives recent prices more weight than past prices.\n\nFor example, a four-period EMA has prices of 1.5554, 1.5555, 1.5558, and 1.5560. The last value is the most recent and gives a current EMA value of 1.5558.\n\nThe EMA adapts more quickly to price changes than the SMA does. For example, when a price reverses direction, the EMA will reverse direction more quickly than the SMA will, because the EMA formula gives more weight to recent prices and less weight to prices from the past.\n\n### Note\nAs with the SMA, charting platforms do all of the EMA calculations for you. Select the EMA from the indicator list on a charting platform, and apply it to your chart. Go into the settings, and adjust how many periods the indicator should calculate, such as 15, 50, or 100.\n## Weighted Moving Average Calculation\nThe weighted moving average (WMA) gives you a weighted average of recent prices, where the weighting *decreases* with each previous price. This works similarly to the EMA, but you calculate the WMA differently.\n\nWMAs can have different weights assigned based on the number of periods used in the calculation. If you want a weighted moving average of four different prices, then the most recent weighting could be 4 to 10. The previous period could weigh 3 to 10. The third period could have a weighting of 2 to 10.\n\nA weight of 4 to 10, for example, means that you have 10 recent periods and their prices. You choose the four most recent prices. This accounts for 40% of the value of the WMA. The price four periods ago only accounts for 10% of the WMA value.\n\nFor the following example, assume prices of 90, 89, 88, 89, with the most recent price first. You would calculate this as \\[90 x (4\/10)\\] + \\[89 x (3\/10)\\] + \\[88 x (2\/10)\\] + \\[89 x (1\/10)\\] = 36 + 26.7 + 17.6 + 8.9 = 89.2\n\n### Note\nYou can customize the weighted moving average more than the SMA and EMA. The most recent price points are usually given more weight. It could also work the other way, where you give historical prices more weight.\n## Moving Average Trading Uses and Interpretation\nYou can use moving averages for both analysis and trading signals. For analysis, all of the moving averages help highlight the trend. When the price is above its moving average, it shows that the price is trading higher than it has, on average, over the period being analyzed. That helps to confirm an uptrend. When the price sits below its moving average, the price is trading lower on average than it has over the period being analyzed. That helps to confirm a [downtrend](https:\/\/www.thebalancemoney.com\/how-to-spot-and-trade-downtrends-in-any-market-1030886).\n\nWhen the price crosses above its moving average, it is getting stronger relative to where it was in the past, because the most recent price now sits higher than the average. If the price crosses below its moving average, it is getting weaker relative to where it was in the past.\n\nOne longer-term and one shorter-term moving average—for example, 20 and 50 periods—can be added to a chart simultaneously. When the 20-period moving average crosses above the 50 line, it indicates that short-term price momentum is moving to the upside. When the 20-period moving average crosses below the 50 line, it suggests that the short-term price momentum is moving to the downside.\n\n### Note\nMoving averages can also be incorporated with other indicators to provide trade signals.\n\nAn EMA can provide buy signals when combined with [Keltner Channels](https:\/\/www.thebalancemoney.com\/how-to-day-with-trade-keltner-channels-4051613), an indicator with a high, average, and low price that creates a \"channel\" on a chart. A strategy may include buying near the EMA when the trend is up, and the price is pulling back from the top of the Keltner Channel.\n\nOne type of moving average isn't inherently better than others; they calculate the average price differently. Depending on the strategy you’re using, one kind of moving average may work better than another. Try out different moving average combinations, and see which provides you with the best results.\n\nYou may find that, for each market, you need to adjust your settings slightly. A 50-period SMA may provide great signals on one stock, for example, but not on another. A 20-period EMA may help isolate the trend on one [futures contract](https:\/\/www.thebalancemoney.com\/what-are-futures-definition-and-examples-1031172) but not another. All of the moving averages are just tools, and interpreting them is up to the trader, because no indicator works well all the time or in all market conditions.\n\n## Frequently Asked Questions\n- Moving averages are a technical indicator, so look for the button that lets you add indicators. This may be in a settings menu, or it may be its own button. From there, you can choose between simple, exponential, and weighted moving averages. Once the moving average is added to the chart, you can alter the number of periods, whether it uses the close or the low of the day, and other factors along these lines.\n- [Swing traders](https:\/\/www.thebalancemoney.com\/day-trading-verus-swing-trading-4134456) often use a mix of short-term and mid-term moving averages. For instance, a trader may use an 8-day, 24-day, and 50-day moving average. Other traders may use a 6-month moving average or more, in addition to a shorter-term moving average.","meta_canonical":null}

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Boilerpipe Text	Moving averages act as technical indicators that show the average price movement over a certain period. They are often used to help highlight trends , spot trend reversals, and provide trade signals. There are several different types of moving averages. They each create a line on a chart that can help show you which direction a price is moving. Learn the different types of averages used by traders and what they tell you about a price. Simple Moving Average Calculation The simple moving average (SMA) calculates an average of the last n prices, where P x represents the price in a period, and n represents the number of periods. The average "moves" because you are not using all of the data, only recent periods: For example, a four-period SMA with prices of 1.2640, 1.2641, 1.2642, and 1.2641 gives a moving average of 1.2641 using the calculation (1.2640 + 1.2641 + 1.2642 + 1.2641) / 4 = 1.2641. While knowing how to calculate a simple average is a good skill to have, trading and chart platforms figure it out for you. You select the SMA indicator from the list of charting indicators and apply it to the chart. Then you adjust the number of periods you want to use. You typically make adjustments to the indicators in the Settings menu section of a trading platform. Note On many platforms, you can locate the settings by double-clicking on the indicator itself. The advantage of an SMA is that you know what you are getting. The SMA value equals the average price for the number of periods in the SMA calculation. Traders commonly used eight, 20, 50, 100, and 200 periods for an SMA. For example, if using a 100-period SMA, the current value of the SMA on the chart is the average price over the last 100 periods or price bars. Some charts include the SMA, along with an exponential moving average (EMA). They can also have a weighted moving average (WMA) on a one-minute stock chart. Due to their different calculations, the indicators appear at different price levels on the chart. Exponential Moving Average Calculation The exponential moving average (EMA) is a weighted average of recent period's prices. It uses an exponentially decreasing weight from each previous price/period. In other words, the formula gives recent prices more weight than past prices. For example, a four-period EMA has prices of 1.5554, 1.5555, 1.5558, and 1.5560. The last value is the most recent and gives a current EMA value of 1.5558. The EMA adapts more quickly to price changes than the SMA does. For example, when a price reverses direction, the EMA will reverse direction more quickly than the SMA will, because the EMA formula gives more weight to recent prices and less weight to prices from the past. Note As with the SMA, charting platforms do all of the EMA calculations for you. Select the EMA from the indicator list on a charting platform, and apply it to your chart. Go into the settings, and adjust how many periods the indicator should calculate, such as 15, 50, or 100. Weighted Moving Average Calculation The weighted moving average (WMA) gives you a weighted average of recent prices, where the weighting decreases with each previous price. This works similarly to the EMA, but you calculate the WMA differently. WMAs can have different weights assigned based on the number of periods used in the calculation. If you want a weighted moving average of four different prices, then the most recent weighting could be 4 to 10. The previous period could weigh 3 to 10. The third period could have a weighting of 2 to 10. A weight of 4 to 10, for example, means that you have 10 recent periods and their prices. You choose the four most recent prices. This accounts for 40% of the value of the WMA. The price four periods ago only accounts for 10% of the WMA value. For the following example, assume prices of 90, 89, 88, 89, with the most recent price first. You would calculate this as [90 x (4/10)] + [89 x (3/10)] + [88 x (2/10)] + [89 x (1/10)] = 36 + 26.7 + 17.6 + 8.9 = 89.2 Note You can customize the weighted moving average more than the SMA and EMA. The most recent price points are usually given more weight. It could also work the other way, where you give historical prices more weight. Moving Average Trading Uses and Interpretation You can use moving averages for both analysis and trading signals. For analysis, all of the moving averages help highlight the trend. When the price is above its moving average, it shows that the price is trading higher than it has, on average, over the period being analyzed. That helps to confirm an uptrend. When the price sits below its moving average, the price is trading lower on average than it has over the period being analyzed. That helps to confirm a downtrend . When the price crosses above its moving average, it is getting stronger relative to where it was in the past, because the most recent price now sits higher than the average. If the price crosses below its moving average, it is getting weaker relative to where it was in the past. One longer-term and one shorter-term moving average—for example, 20 and 50 periods—can be added to a chart simultaneously. When the 20-period moving average crosses above the 50 line, it indicates that short-term price momentum is moving to the upside. When the 20-period moving average crosses below the 50 line, it suggests that the short-term price momentum is moving to the downside. Note Moving averages can also be incorporated with other indicators to provide trade signals. An EMA can provide buy signals when combined with Keltner Channels , an indicator with a high, average, and low price that creates a "channel" on a chart. A strategy may include buying near the EMA when the trend is up, and the price is pulling back from the top of the Keltner Channel. One type of moving average isn't inherently better than others; they calculate the average price differently. Depending on the strategy you’re using, one kind of moving average may work better than another. Try out different moving average combinations, and see which provides you with the best results. You may find that, for each market, you need to adjust your settings slightly. A 50-period SMA may provide great signals on one stock, for example, but not on another. A 20-period EMA may help isolate the trend on one futures contract but not another. All of the moving averages are just tools, and interpreting them is up to the trader, because no indicator works well all the time or in all market conditions. Frequently Asked Questions Moving averages are a technical indicator, so look for the button that lets you add indicators. This may be in a settings menu, or it may be its own button. From there, you can choose between simple, exponential, and weighted moving averages. Once the moving average is added to the chart, you can alter the number of periods, whether it uses the close or the low of the day, and other factors along these lines. Swing traders often use a mix of short-term and mid-term moving averages. For instance, a trader may use an 8-day, 24-day, and 50-day moving average. Other traders may use a 6-month moving average or more, in addition to a shorter-term moving average.
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[brand's fact checking process](https://www.thebalancemoney.com/about-us-5104704#toc-editorial-guidelines) In This Article View All In This Article - [Simple Moving Average Calculation](https://www.thebalancemoney.com/simple-exponential-and-weighted-moving-averages-1031196#toc-simple-moving-average-calculation) - [Exponential Moving Average Calculation](https://www.thebalancemoney.com/simple-exponential-and-weighted-moving-averages-1031196#toc-exponential-moving-average-calculation) - [Weighted Moving Average Calculation](https://www.thebalancemoney.com/simple-exponential-and-weighted-moving-averages-1031196#toc-weighted-moving-average-calculation) - [Moving Average Trading Uses and Interpretation](https://www.thebalancemoney.com/simple-exponential-and-weighted-moving-averages-1031196#toc-moving-average-trading-uses-and-interpretation) - [Frequently Asked Questions](https://www.thebalancemoney.com/simple-exponential-and-weighted-moving-averages-1031196#toc-faq-fdac6fa1-b614-4903-be12-cc047e4ff721) Close ![example of sma, ema, and wma on price chart](https://www.thebalancemoney.com/thmb/XdJIgXrNrQwJYawJWByt2wcv5pM=/1500x0/filters:no_upscale\(\):max_bytes\(150000\):strip_icc\(\)/smaemaandwma-59d66ba6d963ac0010f68371.jpg) ![example of sma, ema, and wma on price chart](https://www.thebalancemoney.com/thmb/XdJIgXrNrQwJYawJWByt2wcv5pM=/1500x0/filters:no_upscale\(\):max_bytes\(150000\):strip_icc\(\)/smaemaandwma-59d66ba6d963ac0010f68371.jpg) Credit: TradingView.com Moving averages act as technical indicators that show the average price movement over a certain period. They are often used to help highlight [trends](https://www.thebalancemoney.com/trend-following-in-commodities-trading-809367), spot trend reversals, and provide trade signals. There are several different types of moving averages. They each create a line on a chart that can help show you which direction a price is moving. Learn the different types of averages used by traders and what they tell you about a price. ## Simple Moving Average Calculation The [simple moving average (SMA)](https://www.thebalancemoney.com/what-is-a-simple-moving-average-5207024) calculates an average of the last n prices, where Px represents the price in a period, and n represents the number of periods. The average "moves" because you are not using all of the data, only recent periods: ![Simple Moving Average]() ![Simple Moving Average](https://www.thebalancemoney.com/thmb/7mHK62twRpMKP55Y1rJrHaiaGUM=/1500x0/filters:no_upscale\(\):max_bytes\(150000\):strip_icc\(\)/SMA-f19ef44569874d9ba635cd2e85a3343e.jpg) For example, a four-period SMA with prices of 1.2640, 1.2641, 1.2642, and 1.2641 gives a moving average of 1.2641 using the calculation (1.2640 + 1.2641 + 1.2642 + 1.2641) / 4 = 1.2641. While knowing how to calculate a simple average is a good skill to have, [trading and chart platforms](https://www.thebalancemoney.com/tools-and-services-needed-for-day-trading-1031037) figure it out for you. You select the SMA indicator from the list of charting indicators and apply it to the chart. Then you adjust the number of periods you want to use. You typically make adjustments to the indicators in the Settingsmenu section of a trading platform. ### Note On many platforms, you can locate the settings by double-clicking on the indicator itself. The advantage of an SMA is that you know what you are getting. The SMA value equals the average price for the number of periods in the SMA calculation. Traders commonly used eight, 20, 50, 100, and 200 periods for an SMA. For example, if using a 100-period SMA, the current value of the SMA on the chart is the average price over the last 100 periods or price bars. Some charts include the SMA, along with an exponential moving average (EMA). They can also have a weighted moving average (WMA) on a one-minute stock chart. Due to their different calculations, the indicators appear at different price levels on the chart. ## Exponential Moving Average Calculation The exponential moving average (EMA) is a weighted average of recent period's prices. It uses an exponentially decreasing weight from each previous price/period. In other words, the formula gives recent prices more weight than past prices. ![Exponential Moving Average]() ![Exponential Moving Average](https://www.thebalancemoney.com/thmb/6IneEiyZMGnDVws0WcKm04xrIto=/1500x0/filters:no_upscale\(\):max_bytes\(150000\):strip_icc\(\)/EMA-a566789cf300425c80352fb70a6c0666.jpg) For example, a four-period EMA has prices of 1.5554, 1.5555, 1.5558, and 1.5560. The last value is the most recent and gives a current EMA value of 1.5558. The EMA adapts more quickly to price changes than the SMA does. For example, when a price reverses direction, the EMA will reverse direction more quickly than the SMA will, because the EMA formula gives more weight to recent prices and less weight to prices from the past. ### Note As with the SMA, charting platforms do all of the EMA calculations for you. Select the EMA from the indicator list on a charting platform, and apply it to your chart. Go into the settings, and adjust how many periods the indicator should calculate, such as 15, 50, or 100. ## Weighted Moving Average Calculation The weighted moving average (WMA) gives you a weighted average of recent prices, where the weighting decreases with each previous price. This works similarly to the EMA, but you calculate the WMA differently. ![Weighted Moving Average]() ![Weighted Moving Average](https://www.thebalancemoney.com/thmb/VrctvaOFqYeUGRZwW3oShEpAv50=/1500x0/filters:no_upscale\(\):max_bytes\(150000\):strip_icc\(\)/WMA-2cada5373e76459a947b8c7fc106f41e.jpg) WMAs can have different weights assigned based on the number of periods used in the calculation. If you want a weighted moving average of four different prices, then the most recent weighting could be 4 to 10. The previous period could weigh 3 to 10. The third period could have a weighting of 2 to 10. A weight of 4 to 10, for example, means that you have 10 recent periods and their prices. You choose the four most recent prices. This accounts for 40% of the value of the WMA. The price four periods ago only accounts for 10% of the WMA value. For the following example, assume prices of 90, 89, 88, 89, with the most recent price first. You would calculate this as \[90 x (4/10)\] + \[89 x (3/10)\] + \[88 x (2/10)\] + \[89 x (1/10)\] = 36 + 26.7 + 17.6 + 8.9 = 89.2 ### Note You can customize the weighted moving average more than the SMA and EMA. The most recent price points are usually given more weight. It could also work the other way, where you give historical prices more weight. ## Moving Average Trading Uses and Interpretation You can use moving averages for both analysis and trading signals. For analysis, all of the moving averages help highlight the trend. When the price is above its moving average, it shows that the price is trading higher than it has, on average, over the period being analyzed. That helps to confirm an uptrend. When the price sits below its moving average, the price is trading lower on average than it has over the period being analyzed. That helps to confirm a [downtrend](https://www.thebalancemoney.com/how-to-spot-and-trade-downtrends-in-any-market-1030886). When the price crosses above its moving average, it is getting stronger relative to where it was in the past, because the most recent price now sits higher than the average. If the price crosses below its moving average, it is getting weaker relative to where it was in the past. One longer-term and one shorter-term moving average—for example, 20 and 50 periods—can be added to a chart simultaneously. When the 20-period moving average crosses above the 50 line, it indicates that short-term price momentum is moving to the upside. When the 20-period moving average crosses below the 50 line, it suggests that the short-term price momentum is moving to the downside. ### Note Moving averages can also be incorporated with other indicators to provide trade signals. An EMA can provide buy signals when combined with [Keltner Channels](https://www.thebalancemoney.com/how-to-day-with-trade-keltner-channels-4051613), an indicator with a high, average, and low price that creates a "channel" on a chart. A strategy may include buying near the EMA when the trend is up, and the price is pulling back from the top of the Keltner Channel. One type of moving average isn't inherently better than others; they calculate the average price differently. Depending on the strategy you’re using, one kind of moving average may work better than another. Try out different moving average combinations, and see which provides you with the best results. You may find that, for each market, you need to adjust your settings slightly. A 50-period SMA may provide great signals on one stock, for example, but not on another. A 20-period EMA may help isolate the trend on one [futures contract](https://www.thebalancemoney.com/what-are-futures-definition-and-examples-1031172) but not another. All of the moving averages are just tools, and interpreting them is up to the trader, because no indicator works well all the time or in all market conditions. ## Frequently Asked Questions - How do you add moving average to a chart? Moving averages are a technical indicator, so look for the button that lets you add indicators. This may be in a settings menu, or it may be its own button. From there, you can choose between simple, exponential, and weighted moving averages. Once the moving average is added to the chart, you can alter the number of periods, whether it uses the close or the low of the day, and other factors along these lines. - How should you format moving averages for swing trading? [Swing traders](https://www.thebalancemoney.com/day-trading-verus-swing-trading-4134456) often use a mix of short-term and mid-term moving averages. For instance, a trader may use an 8-day, 24-day, and 50-day moving average. Other traders may use a 6-month moving average or more, in addition to a shorter-term moving average. Was this page helpful? Thanks for your feedback\! Tell us why\! 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Readable Markdown	Moving averages act as technical indicators that show the average price movement over a certain period. They are often used to help highlight [trends](https://www.thebalancemoney.com/trend-following-in-commodities-trading-809367), spot trend reversals, and provide trade signals. There are several different types of moving averages. They each create a line on a chart that can help show you which direction a price is moving. Learn the different types of averages used by traders and what they tell you about a price. ## Simple Moving Average Calculation The [simple moving average (SMA)](https://www.thebalancemoney.com/what-is-a-simple-moving-average-5207024) calculates an average of the last n prices, where Px represents the price in a period, and n represents the number of periods. The average "moves" because you are not using all of the data, only recent periods: For example, a four-period SMA with prices of 1.2640, 1.2641, 1.2642, and 1.2641 gives a moving average of 1.2641 using the calculation (1.2640 + 1.2641 + 1.2642 + 1.2641) / 4 = 1.2641. While knowing how to calculate a simple average is a good skill to have, [trading and chart platforms](https://www.thebalancemoney.com/tools-and-services-needed-for-day-trading-1031037) figure it out for you. You select the SMA indicator from the list of charting indicators and apply it to the chart. Then you adjust the number of periods you want to use. You typically make adjustments to the indicators in the Settingsmenu section of a trading platform. ### Note On many platforms, you can locate the settings by double-clicking on the indicator itself. The advantage of an SMA is that you know what you are getting. The SMA value equals the average price for the number of periods in the SMA calculation. Traders commonly used eight, 20, 50, 100, and 200 periods for an SMA. For example, if using a 100-period SMA, the current value of the SMA on the chart is the average price over the last 100 periods or price bars. Some charts include the SMA, along with an exponential moving average (EMA). They can also have a weighted moving average (WMA) on a one-minute stock chart. Due to their different calculations, the indicators appear at different price levels on the chart. ## Exponential Moving Average Calculation The exponential moving average (EMA) is a weighted average of recent period's prices. It uses an exponentially decreasing weight from each previous price/period. In other words, the formula gives recent prices more weight than past prices. For example, a four-period EMA has prices of 1.5554, 1.5555, 1.5558, and 1.5560. The last value is the most recent and gives a current EMA value of 1.5558. The EMA adapts more quickly to price changes than the SMA does. For example, when a price reverses direction, the EMA will reverse direction more quickly than the SMA will, because the EMA formula gives more weight to recent prices and less weight to prices from the past. ### Note As with the SMA, charting platforms do all of the EMA calculations for you. Select the EMA from the indicator list on a charting platform, and apply it to your chart. Go into the settings, and adjust how many periods the indicator should calculate, such as 15, 50, or 100. ## Weighted Moving Average Calculation The weighted moving average (WMA) gives you a weighted average of recent prices, where the weighting decreases with each previous price. This works similarly to the EMA, but you calculate the WMA differently. WMAs can have different weights assigned based on the number of periods used in the calculation. If you want a weighted moving average of four different prices, then the most recent weighting could be 4 to 10. The previous period could weigh 3 to 10. The third period could have a weighting of 2 to 10. A weight of 4 to 10, for example, means that you have 10 recent periods and their prices. You choose the four most recent prices. This accounts for 40% of the value of the WMA. The price four periods ago only accounts for 10% of the WMA value. For the following example, assume prices of 90, 89, 88, 89, with the most recent price first. You would calculate this as \[90 x (4/10)\] + \[89 x (3/10)\] + \[88 x (2/10)\] + \[89 x (1/10)\] = 36 + 26.7 + 17.6 + 8.9 = 89.2 ### Note You can customize the weighted moving average more than the SMA and EMA. The most recent price points are usually given more weight. It could also work the other way, where you give historical prices more weight. ## Moving Average Trading Uses and Interpretation You can use moving averages for both analysis and trading signals. For analysis, all of the moving averages help highlight the trend. When the price is above its moving average, it shows that the price is trading higher than it has, on average, over the period being analyzed. That helps to confirm an uptrend. When the price sits below its moving average, the price is trading lower on average than it has over the period being analyzed. That helps to confirm a [downtrend](https://www.thebalancemoney.com/how-to-spot-and-trade-downtrends-in-any-market-1030886). When the price crosses above its moving average, it is getting stronger relative to where it was in the past, because the most recent price now sits higher than the average. If the price crosses below its moving average, it is getting weaker relative to where it was in the past. One longer-term and one shorter-term moving average—for example, 20 and 50 periods—can be added to a chart simultaneously. When the 20-period moving average crosses above the 50 line, it indicates that short-term price momentum is moving to the upside. When the 20-period moving average crosses below the 50 line, it suggests that the short-term price momentum is moving to the downside. ### Note Moving averages can also be incorporated with other indicators to provide trade signals. An EMA can provide buy signals when combined with [Keltner Channels](https://www.thebalancemoney.com/how-to-day-with-trade-keltner-channels-4051613), an indicator with a high, average, and low price that creates a "channel" on a chart. A strategy may include buying near the EMA when the trend is up, and the price is pulling back from the top of the Keltner Channel. One type of moving average isn't inherently better than others; they calculate the average price differently. Depending on the strategy you’re using, one kind of moving average may work better than another. Try out different moving average combinations, and see which provides you with the best results. You may find that, for each market, you need to adjust your settings slightly. A 50-period SMA may provide great signals on one stock, for example, but not on another. A 20-period EMA may help isolate the trend on one [futures contract](https://www.thebalancemoney.com/what-are-futures-definition-and-examples-1031172) but not another. All of the moving averages are just tools, and interpreting them is up to the trader, because no indicator works well all the time or in all market conditions. ## Frequently Asked Questions - Moving averages are a technical indicator, so look for the button that lets you add indicators. This may be in a settings menu, or it may be its own button. From there, you can choose between simple, exponential, and weighted moving averages. Once the moving average is added to the chart, you can alter the number of periods, whether it uses the close or the low of the day, and other factors along these lines. - [Swing traders](https://www.thebalancemoney.com/day-trading-verus-swing-trading-4134456) often use a mix of short-term and mid-term moving averages. For instance, a trader may use an 8-day, 24-day, and 50-day moving average. Other traders may use a 6-month moving average or more, in addition to a shorter-term moving average.
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