A simple moving average (SMA) is just the average closing price over the last N days, recalculated each day. A 50-day SMA smooths the last 50 closes; a 200-day SMA smooths the last 200. It lags — that's the point. By averaging away the daily noise it leaves a slow line that shows the direction of the trend.
How it's read
The most-watched version is the 200-day. Price above its 200-day average is widely treated as an uptrend; price below it as a downtrend. Because it's slow, it keeps you out of small wiggles but turns late — you give up the top and the bottom in exchange for not being whipsawed by every rally and dip.
This one we actually use
Our Trend Following (200-day MA) strategy is built on exactly this: it holds the names trading above their 200-day average and steps aside (to cash) when they fall below. It's fully systematic — the rule re-run on new data, no discretion — and you can watch its real, costed track record live. Unlike most chart lines here, this is a documented effect with published evidence (see the backtest and survivorship notes for why that matters).
Educational material — not investment advice.