What is the definition of a "Moving average"?

Answer 1

A moving average is for a defined period of time. So, the 50 day moving average is for the last 50 days. It is called moving because the average moves everyday.

For example, you have 5 numbers 1,2,3,4,5, - the average would be 3. if this was a moving average, then tomorrow, whe nthere was a new number, you would do it again, but only using the 5 most recent numbers. So you now have six numbers 1,2,3,4,5,6, but the 5 day moving average only looks att the last 5 numbers: 2,3,4,5,6, which have an average of 4.

a regular average looks at all numbers, a moving average ooks a a determined set of numbers, and so when graphed out, the numbers used to calculate the average move along the line and new numbers are added.

This removes old numbers from the results and some believe gives you a more accurate picture of what the stock is likely to do in the short term

Answer 2

Moving average: Simply add the total values and divide by the number of values. Then plot that number and join the points on the curve.

So lets say you have 4+5+6+3 and you can see 4 number values there. So the average for that would be 4+5+6+3=18. Now 18 would be divided by 4 (since you have 4 numbers)which would equal 4.5. Then then next grouping would be lets say 4+5+6+3+2 and that sum would equal 20 And that would be divided by 5 (since now you have 5 numbers)whiich would equal 4 that is the average.

So therefore the running average is 4.5, and 4 and so on as you keep adding numbers. Stocks give daily running averages.