What is Moving Average? 📈 [Explained]?

A moving average is like taking a bunch of numbers and making them smoother so you can see the bigger picture more clearly.

Imagine you're on a playground swing. Every time you go up, it's like a high number, and every time you come down, it's like a low number. If you just look at each swing separately, it might seem like you’re going all over the place. But if you take an average of your swings, say, the last five, you can see how you're generally moving up or down overall. That’s what a moving average does with numbers: it helps you see trends more easily by averaging them out as they come in.

A moving average looks at a set number of recent values and finds their average. Then, when the next value comes in, it drops off the old one and adds the new one, kind of like shifting a window forward on a line of numbers. This helps you see if things are going up or down over time without getting distracted by every little change.

Think of it like watching your favorite cartoon, sometimes there are quick cuts between scenes, but the moving average is like taking a slow-motion look at how the story is unfolding overall.