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What is it?
The Simple Moving Average (SMA) is the average price over a set period, giving equal weight to all prices. It’s a straightforward way to smooth price data and spot trends. How is it used?
  • Trend direction: An upward SMA signals a bullish trend; a downward SMA signals bearish.
  • Crossovers: A short SMA (e.g., 50) crossing above a long SMA (e.g., 200) is a “golden cross” (buy); crossing below is a “death cross” (sell).
  • Support/resistance: SMAs often act as dynamic support or resistance.
How is it calculated? SMA = (Price1 + Price2 + … + Pricen) / n   Where n is the period (e.g., 50). The above content is designed for informational purposes only, and is explicitly not investment advice. Algo Pilot is a US based technology company and not a bank, broker-dealer, or RIA. As such, Algo Pilot LLC does not provide investment advice and is not a member, SIPC. Brokerage services offered by 3rd parties are not directly affiliated with Algo Pilot LLC, and Algo Pilot users may choose the broker relationship that they desire.
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