It is an MA that focuses on the 200-day period.įor assets like cryptocurrencies that trade on a 24/7 basis, this average covers all the past 200 days.

With what we have discussed above, explaining what a 200-day moving average is is a bit easy. The chart below shows HP stock with a 200-day SMA, EMA, and VWMA. Other types of moving averages are Least Squares, Arnaund Legaux, and Moving Average Ribbon among others.

Weighted moving average (WMA) - This MA also puts more emphasis on the most recent data.

Smoothed moving average ( SMMA) - This is usually a modified version of the EMA since it has a longer period.

Volume-weighted moving average (VWMA) - This MA removes the lag by focusing on the asset price and including volume in its calculation.

Exponential moving average (EMA) - EMA removes the lag by putting more weight on the most recent data.

Simple moving average (SMA) - It is the most basic MA and it tends to take all days or periods equally.

For example, finding a simple moving average of a 200-day period may result in a major lag. These multiple types attempt to solve the fact that the initial MA has some gaps and lags.

There are several types of moving averages. At the time, people used to look at the moving average of the number of cases to see whether the trend was moving in the right direction or not. The concept of moving averages was seen widely during the Covid-19 pandemic. On the other hand, if the price moves below $4, it can be perceived as if it is getting undervalued. Therefore, if the price suddenly rises to $20, we can assume that the overall price is overvalued. For example, if the price of an asset has traded at $10, $12, $14, and $15 in a four-day period, then the average of this price is $12.75. A moving average is an indicator that seeks to find the average price of an asset in a certain period of time.

200 ema vs 200 ma