Simple Moving Average (SMA)
The average price over the last N periods — the baseline trend line of technical analysis.
What it means
An SMA averages the last N values and slides forward as new data arrives. Price above a rising average is the simplest workable definition of an uptrend; crossings and distances from the average are building blocks for hundreds of systems.
Every average trades smoothness against lag: a short SMA hugs price but whipsaws, a long one is stable but late. There is no correct N — only an N whose trade-offs fit the holding period you actually trade.
Why traders care
- A robust, parameter-light trend filter that is hard to overfit badly.
- Distance from the average doubles as a stretch (mean-reversion) measure.
In a TraderWe strategy
if Price > Sma(60) and Sma(60) > Sma(300):
Buy()Price above the 1-minute average, which is itself above the 5-minute average — stacked trend.
Related terms
Educational content, not investment advice. Engine details describe how TraderWe computes this value; other platforms may define it differently.