A moving average is the average of a stock's closing prices over a set number of recent periods, such as 50 days, recalculated each period so that it moves along the chart.
A stock's last five daily closes are $20, $21, $22, $21 and $23. They add up to $107, so the 5-day simple moving average is $107 ÷ 5 = $21.40.
Tomorrow it closes at $24. The oldest close, $20, drops out and $24 joins, so the new average is ($21 + $22 + $21 + $23 + $24) ÷ 5 = $22.20. The line smooths out daily swings, which makes the direction easier to see. It is built from past prices, so it always lags.
Moving average is one of the five free indicators on JagSim's chart, with Bollinger Bands, RSI, MACD and Volume. Free members can show 2 at a time plus Volume, and Pro members all 14 indicators at once. The chart's Interval row decides what each period is, from 1 minute to 1 day.
A simple moving average (SMA) weights every close equally. An exponential moving average (EMA) gives more weight to recent closes, so it reacts faster to new moves.
Two widely watched averages of daily closes. The 50-day follows the medium-term trend and the 200-day the long-term trend, and many traders note when the price crosses either one.
When a shorter average crosses a longer one, such as the 50-day crossing above the 200-day. Crossovers lag, and in a sideways market they often give false starts.
No. They summarize past prices. They show the trend so far, not where the price will go.
Last updated: October 2026
Educational only. Not investment advice. JagSim is a simulator, not a broker.
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