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One of the benefits of using the moving averages is that gives you the trend as well as smooths out fluctuations to an extent.

Moving average is heavily used for technical analysis and a lot of banks and stock-market analysts use it on a daily basis (below is an example I got from the Market Realist site). And if on Day 4 I ask you the 3-day moving average temperature, you will give me the average of Day 2, 3, and 4.Īs new data is added, you keep the time period (3 days) the same but use the latest data to calculate the moving average. If I have three days of daily temperature data, you can easily tell me the average of the last three days (hint: you can use the AVERAGE function in Excel to do this).Ī Moving Average (also called as the rolling average or running average) is when you keep the time period of the average the same, but keeps moving as new data is added.įor example, on Day 3, if I ask you the 3-day moving average temperature, you will give me the average temperature value of Day 1, 2 and 3. I am sure you know what’s an average value. Formatting the Moving Average Trend Line.Adding Moving Average Trend Line to a Column Chart.Calculating Exponential Moving Average using Formulas.Calculating Weighted Moving Average using Formulas.Calculating Simple Moving Average using Formulas.Calculating Moving Averages (SMA, WMA, EMA) using Formulas in Excel.Calculating Simple Moving Average (SMA) using Data Analysis Toolpak in Excel.