Khalo uses Simple Moving Averages (SMA) for all of its calculations and for its leading indicators at the chart level. Simple Moving Averages are dependant on a series by series basis. For example, if a series, has monthly observations, then an SMA of 6 would simply indicate six months’ worth of data readings.
A SMA is calculated by taking the sum of a series of given values chosen and then dividing that total figure by the number of periods in question.
Short-Term Averages respond quickly to changes in the series, while Long-Term Averages tend to be slow to react. A 10-day Moving Average would average out the values for the first ten days as the first initial data point. The next data point would drop the earliest price and add the price on day 11 and take the average, and so on, and so on.
Likewise, a 50-day Moving Average would accumulate enough data to average 50 consecutive days of data on a rolling basis.