Simple Moving Average (SMA)

The Simple Moving Average is the arithmetic mean of the last $n$ closing prices. It smooths the price and shows the trend direction over the chosen length, optionally also on a timeframe other than the chart's.

Calculation

$n$ is the Length. Each candle in the window counts equally. The line only starts at the $n$th candle; there is no partial mean over fewer candles.

With Same as chart, the SMA calculates on the chart's candles. The current candle then counts with its current price.

Other timeframes

With Timeframe, the SMA calculates on the candles of a different interval, such as 1D, and carries the result over to the chart:

• Chart finer than the timeframe (SMA on 1D, chart 1H): Each daily value sits where its daily candle closes, and a straight line connects the two values in between. This way the line runs smoothly instead of in steps. The last segment leads to the value of the current daily candle, with the current price as a provisional close.
• Chart coarser than the timeframe (SMA on 4H, chart 1D): Each chart candle carries the value of the last 4H candle that closed within it.
• Same timeframe: the ordinary SMA on the chart candles.

Include current candle takes the timeframe's still-open candle into the average with the close of the chart candle in question: the mean is then taken over the closes of the $n-1$ completed candles of the timeframe before the open candle and the current price. The most recent part of the line thus follows the price, and the history shows what the line would have shown at the time. If the chart is coarser than the timeframe, the switch changes nothing.

Additional lines and crosses

• In the Daily & Weekly tab, you add the SMA 20, 50, 100 and 200 on 1D and on 1W, each with its own color.
• The Custom tab has four free lines with their own timeframe and length (by default 21 on 1D, 9 on 1D, 21 on 1W and 200 on 4H).
• Golden & Death Cross places a ring on the 50-day SMA where it crosses the 200-day SMA: turquoise upward (Golden Cross), red downward (Death Cross). The rings also appear if the two lines themselves are off.

How to read it

• Price above a rising SMA: uptrend over this length. Price below it and the line falling: downtrend.
• Long SMAs (100, 200) count as closely watched support and resistance; short ones (10–20) follow the price closely.
• The SMA also moves when an old candle drops out of the window. A large outlier therefore shifts the line twice: when it enters and $n$ candles later, when it drops out.

Settings

Limitations

The SMA lags the price, by $(n-1)/2$ candles on average. On a different timeframe, the line needs $n$ completed candles of that timeframe. For young assets, an SMA 200 on 1W is therefore missing entirely.

Related indicators

• Relative Strength Index (RSI)
• Seasonality Indicator
• Short-Term Risk Score
• SMA 100
• SMA 20
• SMA 200