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A moving average is a method of "smoothing out" the variation of a series of data points such as a stock's daily prices. A 30 day moving average is calculated at any point in time by adding up the closing prices beginning with a given day and the 29 preceding days and then dividing by 30. The higher the number of days included in the moving average, the more slowly the moving average will respond to price changes.

There is also the concept of an exponential moving average (EMA) as contrasted to the simple moving average (SMA) described above. The EMA gives more weight to the more recent price values whereas the SMA gives equal weight to all price values used in the average.

For more information, see

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