Simple Moving Average (SMA SMA) Beginner's Guide
SMA By calculating the average closing price over a period of time to smooth short-term fluctuations, it is commonly used to observe trends. It provides only a reference based on historical prices and cannot, on its own, guarantee future price movements or trading results.
SMA What Is It
Simple Moving Average (SMA SMA) is a technical analysis tool. It averages an asset's closing prices over a specified period and plots the consecutive results as a line, reducing the interference of short-term price fluctuations and making the overall trend easier to observe. Because the calculation is based on historical data,SMA it reflects existing price movements rather than providing a definitive prediction of future price movements.
Calculation and Update Method
When calculating SMA, first add up the closing prices within the selected period, then divide by the number of periods. For example, 5 days' closing price is 10、11、12、13 and 14 USD, the total is 60, so the 5-day SMA is 12 USD. After the new 1 days' closing price is added, the earliest 1 days' data is removed, and the new average is recalculated, so this line continues to move over time.
Periods and Crossover Signals
A shorter-period SMA SMA is more sensitive to recent price changes, while a longer-period SMA SMA places greater emphasis on the overall trend. Crossings between the price and the SMA SMA, as well as crossovers between SMAs of different periods,SMA are commonly used to help identify trends. 50-day SMA SMA crossing upward through the 200-day SMA SMA is called a golden cross; crossing downward is called a death cross. These signals still need to be assessed together with other information.
Original Tutorial
https://www.binance.com/zh-CN/academy/glossary/simple-moving-average-sma
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