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A moving average summarizes past prices. Its period changes the question it answers.
Choose what you want to summarize
A simple moving average, or SMA, gives equal weight to observations in its window. An exponential moving average, or EMA, puts more weight on recent observations. Both describe past data. Neither turns a chart into a prediction of the next session.
Set the period in the chart
Add an SMA or EMA overlay and choose its period in the indicator settings. On daily data, a 50-period average refers to 50 daily bars, not 50 calendar days. A longer window summarizes more history and will respond differently to a recent price change.
Compare observations consistently
Look at the relationship between price and the average over time. If you compare two symbols, use the same average type and period. A crossover describes a relationship that occurred; further research is needed to understand the surrounding market and company context.
Carry the condition into a scan
Once the comparison is clear, you can explore a supported moving-average condition in CleverScan. Check the documentation and available history. The Trend matrix panel on the dashboard Tools page also groups documented average comparisons for the main benchmarks, with the source values available in Symbol Analysis.
Calculate equal and exponential weighting
A five-session SMA of hypothetical closes 10, 11, 12, 13 and 14 is 12. The oldest observation leaves the window when a new one enters. An EMA uses a recursive weight of 2 ÷ (n + 1); at n = 5 its weight is one third. From an EMA of 12 and a new close of 15, the next EMA is 13. Its starting convention must be stated when comparing implementations. For SMA 20, 50 or 200, sum that many completed-session closes and divide by the same count. Twenty hypothetical closes consisting of ten at 100 and ten at 110 produce SMA 20 of 105; the fifty- and two-hundred-session calculations use their own full windows.
SMA(5) = (10 + 11 + 12 + 13 + 14) ÷ 5 = 12
EMA next = (1/3 × 15) + (2/3 × 12) = 13Compare 20, 50 and 200-session questions
Twenty sessions summarize a shorter window than fifty or two hundred. The shorter average responds sooner to recent changes, while the longer one retains more older observations. At a hypothetical close of 105, SMA 20 of 104, SMA 50 of 100 and SMA 200 of 98, price is above all three; that current state does not show that a cross happened today. Sideways prices can cross any average repeatedly.
Distinguish crosses, envelopes and bands
A golden cross is SMA 50 moving above SMA 200 after being at or below it in the preceding session; a death cross reverses that relationship. A weighted average assigns explicit window weights, while an EMA retains recursive influence. An envelope uses a fixed percentage offset from an average; Bollinger Bands use standard deviation, so the width can vary.
Read our data and methodology notes for calculation context. This guide explains research tools and observations. It does not recommend a trade or investment.