# Simple Moving Average (SMA)

Category: trend

SMA calculates the average price over a fixed number of periods, giving equal weight to each period. It smooths price action to reveal the underlying trend.

## Formula

```text
SMA = (P1 + P2 + ... + Pn) / N
where P = price, N = number of periods
```

## Common strategies

- Golden cross: SMA(50) crossing above SMA(200) — a bullish long-term signal.
- Death cross: SMA(50) crossing below SMA(200) — a bearish long-term signal.
- Support/resistance: SMA(200) acts as dynamic support in bull markets and resistance in bear markets.

## How CommonQuant uses it

CommonQuant pre-calculates SMA(20), SMA(50), and SMA(200) on all timeframes. DSL strategies can reference sma(period).

## Frequently asked questions

### What is a golden cross?

A golden cross occurs when the 50-day SMA crosses above the 200-day SMA. It's considered one of the most reliable bullish signals in technical analysis.

### SMA vs EMA — what's the difference?

SMA gives equal weight to all periods, while EMA weights recent prices more heavily. EMA reacts faster; SMA is smoother. See /compare/sma-vs-ema for details.

Canonical: https://commonquant.ai/learn/indicators/sma