How to Calculate Simple Moving Average?

How do you find Simple Moving Average (SMA)?

SMA Calculation

Simple moving average is a simple or arithmetic moving average that is calculated by adding all the closing prices for a number of time periods and then dividing it by the total number of periods. Learn how to calculate simple moving average in this tutorial.

Formula :
SMA = (P_m + P_m-1 + .......P_m-(n-1)) / n
Where,
(P_m, P_m-1,......, P_m-(n-1)) - Closing Prices of m Periods
n - Total Number of Items.

Step 1 :Consider the closing prices of 5 items as 10, 15, 20, 25, and 30 for 5 days. What is the SMA?
Given,
Closing Prices (P₁, P₂, P₃, P₄, P₅) = 10, 15, 20, 25,30
n = 5
m = 5

Step 2 :Applying the values in the formula,
Simple / Arithmetic Moving average = (10 + 15 + 20 + 25 + 30) / 5
= 100 / 5
= 20

Calculate SMA online using Simple moving average calculator

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