Today we’re going to talk about What Is Smoothed Moving Average? we had mentioned will calculation. Hope this will help you in making your trading experience better.
What Is Smoothed Moving Average?
Smoothed Moving Average is just an addition of EMA (Exponential Moving Average) and SMA (Simple Moving Average). It gives equal weightage to the current price as the previous prices and takes all available price data into account.
A Smoothed Moving Average is an Exponential Moving Average, only with a longer period applied. The Smoothed Moving Average gives the recent prices an equal weighting to the historic ones. The calculation does not refer to a fixed period, but rather takes all available data series into account.
Calculation
SMMA = (SMMA# – SMMA* + CLOSE)/N
Where SMMA# – the smoothed sum of the previous bar, SMMA* the previous smoothed moving average bar, CLOSE The closing price at the time of calculation N the number of smoothing periods
You can also use a combination of SMMA, EMA, and SMA to build a perfect strategy. Although Moving Average is a lagging Indicator based on the last price, we can use it as potential entry.
There are many more Moving Averages but not widely used, i.e., LWMA (Linearly Weighted Moving Average), VWMA (Volume weighted Moving Average), HMA (Hull Moving Average), VMA (Variable Moving Average), etc.
