# Moving Average

*Trading & Technical Analysis — Finicade finance glossary*

A moving average smooths price by averaging the last N periods, filtering noise to reveal direction. Simple averages weight every period equally; exponential ones weight recent data more heavily and therefore turn faster. Every moving average lags by construction — it is describing where price has been — which is why they work in trends and whipsaw badly in ranges.

**Formula:** `SMA = Sum of last N closing prices ÷ N`

**Also known as:** SMA, EMA, exponential moving average, 50-day moving average

**Related terms:** [Golden Cross](https://finicade.com/glossary/golden-cross), [Trend Following](https://finicade.com/glossary/trend-following), [Technical Analysis](https://finicade.com/glossary/technical-analysis), [Trend Line](https://finicade.com/glossary/trend-line), [Momentum Factor](https://finicade.com/glossary/momentum-factor)

Source: https://finicade.com/glossary/moving-average