What is the Full Form of SMA in the Share Market?
The SMA Full Form in the Share Market is Simple Moving Average. It refers to the average closing price of a stock over a specified period. It is referred to as the moving average, as the stock price keeps changing constantly, and so does the moving average.
The features of simple moving average:
A simple moving average is the mean value that is calculated by adding the recent stock prices and then dividing the figure by the number of periods in the calculation average. Short-term moving averages respond quickly to changes in the price of the underlying stock. This metric smoothes out volatility and makes it easier for the investor to view the price trend of the security.
How are SMAs used in technical analysis?
The simple moving average is a trading strategy used by traders to charge the movement in the price of a specific security, ignoring the day-to-day fluctuations in the price. With the help of these metrics, traders can compare short and long-term trends over long periods. It is a very useful tool for performing fundamental and technical analysis of stock and is best used with other indicators such as trend lines and volume analysis.