Definition
The average closing price over a set number of days, recalculated each day. A simple moving average weighs every day equally.
The story
Daily prices are noisy. Averaging the last 50 days smooths the bumps into one gentle line. When coverage says an index is "above its 200-day average," it means today's price is higher than its average over roughly the past 10 months of trading.
Why you'll see it
The 50-day and 200-day averages are the most quoted.
Connects to
Exponential moving averageTrend and trendlineMACDGolden crossVWAP
We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms