Simple Moving Average is one of forex technical indicator used in technical analysis. It’s a Moving Average calculated by adding the closing price of the currency in a certain time, then dividing it by the number of time periods.

Moving averages are used to smooth the data in an array to help eliminate noise and identify trends. The Simple Moving Average is literally the simplest form of a moving average. Each output value is the average of the previous n values.

In a simple moving average, each value in the period carries equal weight, and values outside of the period are not included in the average. That makes it less respond to recent changes in the database, which can be useful for those out.

The calculation of the SMA (Simple Moving Average) is as follows: the currency closing prices for a certain period are pooled and divided by the number of such periods. Generally speaking, the average price of the period is represented by SMA.