SMA (Simple Moving Average)
Plain average of closing prices over the last X candles.
SMA = sum of X closing prices / X. Slower than EMA but smoother. The daily SMA 200 is the classic long-term trend gauge institutions use for allocation. SMA 50/200 crosses give golden/death cross signals. Downside: lag - in fast markets SMA signals after the move ends.
In plain words
Take the last X closing prices, add them, divide by X - that's the average. Shows the broad direction without noise but reacts slowly.
Example
BTC daily SMA 200 was the most-cited level in 2022: price 19k tested SMA 200 = 35k as resistance.
Also known as: simple moving average