Arithmetic average of the last N closes. The most basic trend line; smooths noise at the cost of responsiveness.
SMA(N) = (C₁ + C₂ + … + Cₙ) / N
Trend direction (slope), dynamic support/resistance, moving-average crossovers (fast SMA vs slow SMA), price-vs-MA context.
Whipsaws in ranging markets. Long look-backs lag turning points meaningfully — a 200-SMA reversal comes weeks after the actual top or bottom.
Nifty 50 daily bars with Simple Moving Average (SMA) pre-loaded:
1 strategy uses Simple Moving Average (SMA):