Trends/Moving averages

Simple moving average

The average of the last N closing prices, redrawn at every bar. It smooths out the day-to-day noise.

Moving averagesBest on 3M, 6M, 1YAlso called SMA

Illustration of the simple moving average shape. It is a sketch, not real price data.

What it shows

A simple moving average (SMA) adds up the last N closes and divides by N. When a new bar arrives, the oldest close drops out and the newest is added, so the line moves along with price.

Because it looks backward, it always trails price. A longer N makes a smoother line that trails more. Common choices are 20, 50, 100 and 200.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Choose N (number of bars).
For each bar, add the last N closes.
Divide by N.
Plot the result.

Starting values: N 20, 50 and 200 shown. These are proposed and will be tuned on real price data before launch.

How to read it

The line shows the average price over the last N bars.
Price above the line means the latest close is above its recent average.
A steeper line means the average is changing faster.

Status labels you may see

Label	What it means
Above the average	The last close is above the SMA.
Below the average	The last close is below the SMA.
Crossing	Price crossed the SMA in the last 3 bars.

What cancels it

Nothing cancels it. It is a calculation, not a pattern.

What traders check next

How many bars price has spent on one side of the line.
The slope of the line.
How far price is from the line.

Limits

It lags, so it shows past direction.
In sideways markets price crosses it many times.
Every bar in the window counts equally, so an old spike drops out suddenly.

Try it in forecastviz

Open any ticker and choose Moving averages → Simple moving average in the left menu.
Switch between 3M, 6M, 1Y to see how the picture changes.
Compare with Exponential moving average and Weighted moving average on the same chart.

Open on a ticker

Questions

Which N should I use?

It depends on your time frame. 20, 50 and 200 are common.

Is it the same on every chart?

Yes. The same data gives the same line everywhere.