An average of prices for a specified number of days. If it is a three (3) day moving average, for example, the first three days' prices are averaged (1,2,3), followed by the next three days' average price (2,3,4), and so on. Moving averages are used by technicians to spot changes in trends. The CENTER ONLINE Futures Glossary
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Used in charts and technical analysis, the average of security or commodity prices constructed in a period as short as a few days or as long as several years and showing trends for the latest interval. As each new variable is included in calculating the average, the last variable of the series is deleted. Bloomberg Financial Dictionary
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A technical analysis indicator that provides a way of smoothing data and is used to confirm price trends. It reduces the effects of isolated sharp price movements and shows the underlying trend more clearly. A moving average is usually calculated by adding a series of closing prices and then averaging the data on a period-by-period basis. As the period moves on, the oldest price in the sequence is dropped and replaced by the current price. (Figure 12.)
► See also Technical Analysis.
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moving average UK US noun [C]
► an average that is calculated by using the average of several periods of time up to the present. A moving average changes regularly, with the earliest amount being replaced with the amount based on the most recent data: »
Month-by-month figures are notoriously volatile, whereas a moving average smooths out the effects of the business cycle.
a four-week/three-month/10-year, etc. moving average »Volumes were heavy, reaching 4.4m shares, compared with the 15-day moving average of 2.6m.
Financial and business terms. 2012.