Understand investment products, market mechanics, indicators and research terminology. Each entry includes an explanation, example, cautions and related learning.
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A moving average is the average price over the most recent N periods, recalculated as each new period arrives so that the line smooths short-term noise. The simple moving average (SMA) weights every period equally, while the exponential moving average (EMA) weights recent prices more heavily.
MACD is a trend and momentum indicator, created by Gerald Appel, that subtracts a longer exponential moving average from a shorter one and compares the result with its own smoothed signal line. Its default form uses 12-, 26- and 9-period settings.