SMA (Simple Moving Average)

A Simple Moving Average (SMA) is the average price of a stock over a set number of recent days. You calculate it by adding up the closing prices from, say, the last 50 days, then dividing by 50. You'll see SMAs everywhere in stock charts—they're one of the most popular tools traders use to spot trends. The main idea: a moving average smooths out daily price wiggles so you can see the bigger picture. If a stock's price is bouncing around $100 but its 50-day SMA is $95 and climbing, that suggests upward momentum. It's not a crystal ball, but it helps traders understand whether a stock is generally moving up, down, or sideways.