A simple moving average (SMA) is the unweighted mean of a series' last N values, recalculated at each new point, so short-term noise is smoothed away and the underlying trend becomes easier to read. "Simple" means every value in the window counts the same. In Fincanva it is one of the Indicator choices on a risk condition.
Also seen as: SMA, moving average, MA, rolling average.
How is a simple moving average calculated?
- the average on day t
- the number of periods in the lookback window
- each of the most recent N values, the current one included — the closing price, for a price series
A simple moving average adds up the last N values and divides by N, then repeats that at every new point: each new point drops the oldest value out of the window and takes the newest one in, which is what makes the average "move". A weighted or exponential average, by contrast, gives recent values more pull.
How does Fincanva handle it?
Risk-Off when the S&P 500 is below its 200-day simple moving average.
Go Risk-Off when the of the of .
When the rule flips, switch .
- It is one of four Indicator options on a risk condition's instrument series, alongside raw price, percent change and average momentum.
- With "Simple moving average" selected, a Period field appears next to the indicator; a condition saves with 22, 60, 200 or 252. The app names the resulting series in days — "SPY · 200-day SMA" in a condition's row.
- The indicator only transforms the series being watched. Whether the strategy switches to its Risk-Off allocation is decided by the condition's thresholds, not by the average itself.
- The "S&P 500 200-day moving average" risk template is built on it.
What does it look like in practice?
Take a 200-day simple moving average of a price series. On each trading day, the SMA is the sum of the last 200 closes divided by 200. If the closes over a stretch average out to 400, the SMA reads 400 while the latest close might be 415 — the price sits above its own average, which is what "above the 200-day SMA" means. If the price then falls to 380 and stays there, the SMA does not drop to 380 with it: it eases down day by day as older, higher closes leave the 200-day window and newer, lower ones enter. Shorten the window to 50 days and the same fall pulls the average down roughly four times faster, because each new close carries four times the weight in the mean.
How does the lookback window change an SMA?
A longer window makes the average smoother and slower; a shorter one makes it closer to the raw series. Because the average always looks backwards, it lags the series by construction: after a turn in the underlying series, the SMA keeps carrying older values until they age out of the window, and the longer the window, the longer that takes. This is the standard trade-off of any moving average — less noise, later reaction.