Moving Average

A Moving Average for a Price Series calculates the average value over a set time period. Typically, the period is set in the number of days and moves or rolls forward.

A Moving-Average for a Price Series, such as a Stock Price, moves forward or rolls forward. The significance is that as the last entry enters the calculation, the first entry or last trailing value of the time period is excluded. The average is calculated for the Data Series over a set time period, usually in days. The time period is very flexible, from 5 days to 200 days are not uncommon, depending on the sensibility required. The longer the time period the less sensitive to daily price changes. Moving Averages are used in charts and technical analysis to understand the possible momentum driving a data series.