A moving average is generally used to smooth out a time-series. It simply consists of calculating an average price for each bar of the time-series using preceding bars data.
Moving averages are the most commonly used indicators in technical analysis. By calculating an average price over a period, the moving average allows the trader to easily detect the direction of the trend in different timeframes and to measure the security's momentum by removing the time-series or stock price noise.
There are several types of moving averages. The most commonly used are: the Simple Moving Average and the Exponential Moving Average.
