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Definition

The arithmetic mean or average of a series of prices over a period of time. The longer the period of time studied (that is, the larger the denominator of the average), the less impact each individual data point has on the average. Moving averages of various types are used by technicians to smooth out "noise" within a chart and to give clear signals of a change in the direction of the trend. Read more about moving averages in the modules provided in our course material.

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