SIMPLE MOVING AVERAGE (SMA)

Also known as the arithmetic moving average the SMA is computed by summing the values and dividing by the number of values summed.

For example:
SMA (2, 4, 6, 8) = (2 + 4 +6 + 8) / 4 = 20 / 4 = 5.

For other types of moving average, see Moving Averages in a new browser window.