SMA is a trend indicator which helps in knowing the long term, short term or mid term trend of a stock/index.
It takes two inputs – one is the closing of the stock and the other is the number of days the closing price that needs to be taken into account
SMA is similar to the simple mathematical average that we studied in childhood.
In the attached excel sheet, Column ‘E’ contains the closing price on day to day basis.
Column ‘F’ contains the SMA itself. The look back period in this case is 10, so the first 10 days won’t have any SMA