SMMA — Smoothed Moving Average
Overview
The Smoothed Moving Average applies equal weight to all historical data rather than dropping off older values, producing an ultra-smooth line that excels at identifying the dominant long-term trend. SMMA is the smoothing method used inside the ADX and ATR calculations, making it a foundational building block in technical analysis. It is best suited for stock and forex markets where long-term trend clarity is prized over speed.
How It Works
SMMA(1) = SMA(N). For subsequent bars: SMMA = (previous SMMA × (N − 1) + current close) / N. Because the previous average carries forward, the effective lookback is much longer than N periods. A 20-period SMMA behaves similarly to a 39-period EMA.
Key Signals
- Price above SMMA confirms a long-term uptrend; below confirms a downtrend.
- SMMA flattening after a trend signals potential consolidation.
- SMMA crossovers are rare but highly significant when they occur.
Common Mistakes
- Using SMMA for short-term signals — it's far too slow for scalping or day trading.
- Comparing a 50-period SMMA with a 50-period SMA and expecting similar behaviour.
- Not recognising that SMMA lag is by design — it filters noise at the cost of speed.
More Trend Indicators
Exponential Moving Average (EMA)
The Exponential Moving Average gives more weight to recent prices, making it more responsive to new information than the <a href="/academy/indicators/simple-moving-average" class="text-primary hover:underline">SMA</a> while still smoothing out noise. EMA crossovers are a cornerstone of many <a href="/strategies" class="text-primary hover:underline">trading strategies</a>, from scalping to <a href="/strategies/trading-styles/swing-trading" class="text-primary hover:underline">swing trading</a>, across every asset class. Use the EMA on a professional <a href="/tools/platforms/tradingview" class="text-primary hover:underline">charting platform</a> to fine-tune pullback entries and trend-following setups. Browse our full <a href="/academy/indicators" class="text-primary hover:underline">indicator guide library</a> to learn how the EMA integrates with momentum and volume tools.
Simple Moving Average (SMA)
The Simple Moving Average calculates the arithmetic mean of a security's price over a specified period, smoothing out noise and revealing the underlying trend direction. As one of the foundational tools in <a href="/academy/indicators" class="text-primary hover:underline">technical analysis</a>, the SMA helps traders identify long-term trends in <a href="/market/stocks" class="text-primary hover:underline">stocks</a>, <a href="/market/crypto" class="text-primary hover:underline">crypto</a>, and <a href="/market/forex" class="text-primary hover:underline">forex</a> markets. Pair it with the <a href="/academy/indicators/exponential-moving-average" class="text-primary hover:underline">Exponential Moving Average</a> for faster signals, and visualise both on a professional <a href="/tools/platforms/tradingview" class="text-primary hover:underline">charting platform</a> like TradingView.
Alligator
Bill Williams' Alligator uses three smoothed moving averages displaced forward — the Jaw, Teeth, and Lips — to identify trending and sleeping market phases with an intuitive visual metaphor. When the lines intertwine the Alligator is "sleeping" (range); when they fan out it is "eating" (trending). Combine it with the <a href="/academy/indicators/awesome-oscillator" class="text-primary hover:underline">Awesome Oscillator</a> and <a href="/academy/indicators/gator-oscillator" class="text-primary hover:underline">Gator Oscillator</a> from our <a href="/academy/indicators" class="text-primary hover:underline">indicator guide library</a> for the complete Bill Williams trading system.
Aroon Indicator
The Aroon Indicator measures the number of periods since the most recent high and low, providing an early signal of whether a new trend is forming or weakening. It is especially useful for catching early trend changes in <a href="/market/stocks" class="text-primary hover:underline">stocks</a> and <a href="/market/crypto" class="text-primary hover:underline">crypto</a> before lagging indicators react. Browse our full <a href="/academy/indicators" class="text-primary hover:underline">indicator guide library</a> to pair Aroon with the <a href="/academy/indicators/adx" class="text-primary hover:underline">ADX</a> for stronger trend-strength confirmation.