Statistics: Moving Average (Definitions)

"A trend-following indicator that works best in a trending environment. Moving averages smooth out price action but operate with a time lag. Any number of moving averages can be employed, with different time spans, to generate buy and sell signals. When only one average is employed, a buy signal is given when the price closes above the average. When two averages are employed, a buy signal is given when the shorter average crosses above the longer average. Technicians use three types: simple, weighted, and exponentially smoothed averages." (Guido Deboeck & Teuvo Kohonen (Eds), "Visual Explorations in Finance with Self-Organizing Maps 2nd Ed.", 2000)

"For a time series, an average that is updated as new information is received. With the moving average, the manager employs the most recent observations to calculate an average, which is used as the forecast for the next period." (Jae K Shim & Joel G Siegel, "Budgeting Basics and Beyond", 2008)

[exponential moving average:] "A moving average of data that gives more weight to the more recent data in the period and less weight to the older data in the period. The formula applies weighting factors which decrease exponentially. The weighting for each older data point decreases exponentially, giving much more importance to recent observations while still not discarding older observations entirely." (SQL Server 2012 Glossary, "Microsoft", 2012)

"An average that’s calculated by using only a specified set of values, such as an average based on just the last three values." (E C Nelson & Stephen L Nelson, "Excel Data Analysis For Dummies ", 2015)

"A mathematical average of data points over a specified period of time. Moving averages are used on financial price charts to show the average price over a selected interval of time. Examples are the SMA(9), SMA(20), SMA(50), or SMA(200) referring to 9-, 20-, 50-, or 200-period simple moving averages. Other types of moving averages also exist, such as an exponential moving average (EMA) and triangular moving averages (TMA). The EMA places more emphasis on the most recent data points. The TMA places more emphasis on the center data points of the specified range, that is, 9, 20, 50, 200, and so on." (Russell A Stultz, "The Option Strategy Desk Reference", 2019)