In business, it's a common practice to calculate a moving average of sales for the last 3 months to determine the recent trend.įor example, the moving average of three-month temperatures can be calculated by taking the average of temperatures from January to March, then the average of temperatures from February to April, then of March to May, and so on. In stock trading, moving average is an indicator that shows the average value of a security over a given period of time. It is frequently used in statistics, seasonally-adjusted economic and weather forecasting to understand underlying trends. Generally speaking, moving average (also referred to as rolling average, running average or moving mean) can be defined as a series of averages for different subsets of the same data set.
