Signals

SMA — Simple Moving Average

Smooth price action with a classic rolling average.

What it is

The Simple Moving Average is the unweighted mean of the last N closing prices. It smooths day-to-day noise and gives you a baseline trend line.

When to use it

Tracking medium- and long-term trend direction with 20-, 50-, or 200-day windows.
Building crossover rules such as SMA_20 > SMA_50.
Creating a simple benchmark before testing more reactive indicators.

The maths

SMA(N) = (close[t] + close[t-1] + ... + close[t-N+1]) / N — the unweighted mean of the last N closing prices.

What it tells you

A rising SMA indicates an uptrend; a falling SMA indicates a downtrend. A price crossing above its SMA is often treated as a bullish signal; crossing below as bearish.

REST example

python

import os
import requests

response = requests.get(
  'https://api.financedata.com/v1/signals/SMA/AAPL',
  params={'start_date': '2025-01-01', 'end_date': '2025-04-30', 'period': 20},
  headers={'X-API-Key': os.environ['FDA_KEY']},
  timeout=30,
)
response.raise_for_status()
print(response.json())

MCP example

Tool call body

{
"name": "get_sma",
"arguments": {
  "symbol": "AAPL",
  "start_date": "2025-01-01",
  "end_date": "2025-04-30",
  "period": 20
}
}

Agent prompt that triggers it

What was AAPL doing relative to its 20-day simple moving average through April 2025?