To calculate a 10-day simple moving average, simply add the closing prices of the last 10 days and divide by 10. This process was quite tedious, but proved quite profitable with confirmation of further studies. They calculated market prices by hand, and graphed those prices to denote trends and market direction. Early market practitioners operated without the use of the sophisticated chart metrics in use today, so they relied primarily on market prices as their sole guides. Preferred method for tracking market prices because they are quick to calculate and easy to understand. (Would you like a little background reading? Check out Moving Averages: What Are They?) It is generally understood that simple moving averages (SMA) were used long before exponential moving averages (EMA), because EMAs are built on SMA framework and the SMA continuum was more easily understood for plotting and tracking purposes. Charting analysis can be traced back to 18th Century Japan, yet how and when moving averages were first applied to market prices remains a mystery. These are now considered basic methods currently used by technical analysis traders. Understood, various shaped curves and lines were drawn along the time series in an attempt to predict where the data points might go. Much later, as patterns were developed and correlations discovered. Interpolation, in the form of probability theories and analysis, came Early practitioners of time series analysis were actually more concerned with individual time series numbers than they were with the interpolation of that data. Moving averages are more than the study of a sequence of numbers in successive order.
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