Blog : SMA Indicator
SMA
A Moving Average (MA) is a price-based, lagging indicator that displays the average price of a security over a set period of time. It is used to gauge momentum, confirm trends, and define areas of support and resistance by smoothing out fluctuations in price and volume. As a lagging indicator, it reacts to past events and is used for confirmations and analysis rather than prediction.
| SMA Inputs | |||
|---|---|---|---|
| Trend Following | Mean Reversion | ||
| Period | 20 | Period | 20 |
| Source | close | Source | close |
| SMA | Long - Entry Trigger | Long - Exit Trigger | Short - Entry Trigger | Short - Exit Trigger |
|---|---|---|---|---|
| Trend Following | Price crossover SMA | Price crossunder SMA | Price crossunder SMA | Price crossover SMA |
| Mean Reversion | Price crossunder SMA | Price crossover SMA | Price crossover SMA | Price crossunder SMA |
| SMA | Long - Entry Confluence | Long - Exit Confluence | Short - Entry Confluence | Short - Exit Confluence |
| Trend Following | Price > SMA | Price < SMA | Price < SMA | Price > SMA |
| Mean Reversion | Price < SMA | Price > SMA | Price > SMA | Price < SMA |