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What Is a Simple Moving Average

A simple moving average is the last few closes added up and divided by their number, with every close counting the same. This paper shows you the Nasdaq's ten closes of late August 2025 drawn as columns with the level they average to, the idea as ten identical weights on a beam, the line on the daily chart, the sum and the division on a calculator, and the Method box where Simple is chosen on your platform.

Difficulty
Beginner
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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Ten closes, one level

A simple moving average is the last few closes added up and divided by their number. The ten columns are the Nasdaq's closes from 18 to 29 August 2025, one per day, and the gold line is their simple average, 23451.93. It is the level the columns would settle at if they were water: what stands above the line is exactly enough to fill what is missing below it. Simple means every close counts the same, the oldest as much as the newest.

Ten identical weights

The picture is a beam with ten identical weights along it, one for each of the last ten days, and the point it balances at is the average. Every weight is the same, so the day ten days ago pulls exactly as hard as today. Move any one weight and the beam tips by the same amount, whichever weight it was. That is what simple means in the name: equal, with no day louder than another. Other averages give the newest days heavier weights. This one does not.

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