WHAT IS MOVING AVERAGE & HOW DOES IT WORK?

A moving average is a statistical computation used to examine data points by calculating the averages of different subsets of the entire data set. Moving averages work brilliantly as it is a stock market indicator extensively employed in technical analysis in finance. Determining a stock’s moving average is to smooth out price data by creating an average price that is constantly updated.

The effects of random, short-term variations on the price of a stock over a specific time frame are reduced by computing the MA. The purpose of generating a stock’s moving average is to smooth out price data over a set period of time by creating an average price that is constantly updated.