Glossary / Trend & momentum
Moving average
Also called: MA · simple moving average · SMA
A moving average is the average closing price of a security over a fixed number of recent sessions, recalculated each session so the window rolls forward. It converts a jagged price series into a smoother line.
How it is measured
How is moving average measured?
Add the closing prices over the chosen window and divide by the number of sessions in it. A 50-session average uses the last 50 closes. An exponential variant weights recent closes more heavily than older ones, so it turns sooner. The window length is the only real parameter, and it is chosen, not derived.
Why it matters
Why does moving average matter to a swing trader?
Swing traders use moving averages as a reference line rather than as a measurement in their own right: price sitting above a longer average describes a period in which price has generally risen, and the distance between price and the line describes how far the recent move has carried. Every moving average is arithmetic on prices that have already printed, so it turns after the move it is summarising, not before it.
In Tapeline
Does Tapeline use moving average?
Tapeline's Trend factor does not read moving averages or moving-average crossovers. It measures a multi-month price change and where the latest price sits inside the ticker's own 52-week range.
Tapeline publishes the six factor names and the ordering of their weights. The numeric weights, the scoring equation and the band edges are not published.
Related
See this in the product
What the Trend factor measures · The Trend factor · Full methodology
Related terms
Back to the full glossary.
General information about market vocabulary, written to be descriptive rather than prescriptive. Not investment advice — see the risk disclosure.