simple moving average

Thursday, December 30, 2010 by lemonna ·


















(Example: the line is a fifteen day Simple Moving Average)


A simple moving average is the average stock price over a period of time, it is calculated by adding the stock closing price over a period of time and then dividing this total by the number of time periods. For instance, a fifteen days SMA is the average price of previous fifteen days closing price.

Formula:
SMA =P 1( the first day price of previous days)+P2+P3…+Pn/N



N=the N day

 

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About this blog

I am a day trader. I think Day trading is more profitable than long term investment.For daytraders, there is one thing should always to remember- set a stop loss. In my first year in trading, I wasn't care about the stop loss,I lost a lot of money and I re-studied, watched and paper traded again.Then I made big profit return in my next two years.
Technical indicators is definitely a necessary tool for day traders and easy to learn, so I here to share my experience and provide you useful stock resource and online stock trading tips.
How do I trade:
Normally, I use combination of technical indicators such as MACD,slow stochastic, RSI,Moving average to pick the stock I want. I like to trade stock with support and resistance, or the stock with MACD and Slow Stochastic Divergence.