FTB-C000238 / Statistical method

Simple Moving Average

Simple Moving Average is the arithmetic mean of observations in a declared moving window.

Also known asSMA

Foundation Formula defined 7 linked topicsPublished

Definitions

In plain terms

A 20-day SMA adds the eligible values for 20 sessions and divides by 20, then rolls forward one session at a time.

Technical

The specification fixes price field, window length, session order, minimum periods, adjustment basis, and missing-value treatment.

Scope

It gives equal weight to included observations and is not an EMA.

Formula

SMA = sum(x_i for i in W) / n
LaTeX: SMA_t=\frac{1}{n}\sum_{i\in W_t}x_i
SymbolMeaningUnit
x_ieligible observation iinput unit
nnumber of eligible observationsobservations

Output unit: input unit

Examples

  • A Fintech Builder lesson can compute or identify Simple Moving Average only after declaring its inputs, timing, and edge-case rules.

Common misconceptions

  • It gives equal weight to included observations and is not an EMA.

Concept relationships

Related

Required by

Where this concept is used

Tutorials planned

These catalogued topics use this concept, but their complete build has not shipped yet.

  • D04-F03-A04 Prerequisite
  • D04-F03-A05 Prerequisite
  • D04-F03-A06 Prerequisite
  • D07-F01-A01 Primary
  • D07-F01-A04 Prerequisite
  • D07-F03-A02 Prerequisite
  • D07-F03-A05 Prerequisite

Evidence and governance

  1. Percent Above Moving Average StockCharts ChartSchool · secondary methodology

    Supports: preferred label, short definition, technical definition, formula

    Limits: Threshold interpretation and universe composition are contextual and must not be treated as guaranteed signals.

Reviewed by
fintech-builder-batch-005
Last reviewed
2026-07-27
Next review
2027-07-27
Record status
published
Written by

Fintech engineer building market-data and financial systems, and the author of every article, glossary record, and reference implementation on The Fintech Builder.