Simple Moving Average (SMA)

Moving average indicator which measures the trend direction over a period of time.

Simple Moving Average (SMA) is a moving average indicator which measures the trend direction over a period of time. Unlike EMA, this indicator places the same weight on each and every day within the selected period. Because of this, SMA reacts slower to recent price changes.

Trading application

SMA is a line which is shown within the price graph, moving close to the price and eventually intersecting with it. SMA moving above the price indicates a downtrend while SMA moving below the price indicates an uptrend. It can also act as a level of Support/Resistance in uptrends and downtrends, respectively. SMA is one of the better Moving Averages for identifying Support/Resistance.

We can interpret buy/sell signals by using 2 different SMA lines (one with a shorter period than the other). If the shorter SMA (e.g. a 20 day SMA) crosses upwards over the longer SMA (e.g. 50 days), it is a buy signal. The opposite, where the shorter SMA crosses downwards below the longer SMA, indicates a sell signal. Another interpretation arises when intersecting with the price. A shorter SMA crossing the price from the bottom up, while remaining above the longer SMA, is considered a buy signal, in the same way that the shorter SMA crossing the price from above downwards, while the longer SMA is located above the shorter SMA, indicates a sell signal.

Calculation

$$SMA = X Days Closing Prices Sum / X$$

Parameters

Input Parameters

Name	Type	Range of value	Description
period	int	<1, int.MaxValue>	Number of bars used in the calculation.

Output Parameters

Indicator ouptuts a single value.

Type	Range of value
double	(0, double.MaxValue)

Examples

// Prints the current value of a 20 period SMA using
// the daily bars close price value.
sma = indicators.SMA(20).OnSeries(dailyBars.Close);
Log(sma.Value.ToString());

// Prints the previous value of SMA.
sma = indicators.SMA(20).Keep(2).OnSeries(dailyBars.Close);
Log(sma.Values[1].ToString());

Complete example

using Signals.DataSeries.Bars;
using Signals.Framework;
using Signals.Indicators.SMA;

public class MyStrategy : SingleMarketStrategy
{
    private Bars dailyBars;
    private SMA sma;

    public override void Setup(DataMarketplace data, IndicatorsMarketplace indicators)
    {
        dailyBars = data.Bars(BarPeriodType.Day, 1).WithOffset(50);
        sma = indicators.SMA(20).Keep(2).OnSeries(dailyBars.Close);
    }

    public override void RegisterActions()
    {
        OnUpdateOf(dailyBars).Do(() =>
        {
            // Prints the current SMA value
            Log("The current SMA value is " + sma.Value.ToString());

            // Prints the previous SMA value
            Log("The previous SMA value is " + sma.Values[1].ToString());
        });
    }
}