How to Calculate the 200-Day Moving Average

The 200-day moving average is a widely recognized indicator in financial markets, providing a smoothed representation of an asset’s price over a significant period. This technical analysis tool helps individuals understand the general direction and underlying trend of a security’s price movement. It simplifies complex price data into a single, continuously updated line, making it easier to identify long-term patterns.

Understanding the 200-Day Moving Average

The 200-day moving average is a significant indicator because it filters out daily market noise and short-term price fluctuations. By averaging prices over 200 consecutive trading days, it reveals the broader, long-term trend of an asset. This smoothing effect helps market participants avoid making decisions based on temporary price swings.

Gathering Data for Calculation

To calculate the 200-day moving average, you need specific historical price data for the asset of interest. The standard data point used for this calculation is the daily closing price. Closing prices are preferred because they represent the final settled price for the day, reflecting all trading activity up to the market close.

You will need 200 consecutive daily closing prices to perform this calculation accurately. This dataset provides the necessary historical context for a long-term average. Reliable sources for this data include various financial websites, such as those provided by major financial news outlets, or through your brokerage platform. These platforms typically offer free access to historical stock data.

Performing the Calculation

Calculating the 200-day moving average involves a straightforward arithmetic process once you have gathered the required data. Begin by collecting the closing prices for the most recent 200 consecutive trading days. For example, if today is August 24, 2025, you would gather the closing prices from August 23, 2025, back to approximately November 1, 2024, accounting for weekends and market holidays. Once you have all 200 daily closing prices, sum these values together.

For instance, if you were calculating a simpler 5-day moving average, and your closing prices were $10, $11, $12, $13, and $14, you would add them: $10 + $11 + $12 + $13 + $14 = $60. The next step is to divide this sum by the total number of periods, which in this case is 200. Using the 5-day example, you would divide $60 by 5, resulting in a 5-day moving average of $12. This same principle applies to the 200-day moving average: divide the sum of the 200 closing prices by 200.

While manual calculation is possible, most individuals use spreadsheet software like Microsoft Excel or Google Sheets, employing the “AVERAGE” function across the 200 data points. Online charting platforms also automate this calculation, displaying the moving average line directly on price charts. The underlying mathematical principle remains consistent regardless of the method used.

Interpreting the 200-Day Moving Average

The calculated 200-day moving average offers significant insights into an asset’s price trend and potential future movements. When an asset’s current price is trading above its 200-day moving average, it generally indicates an uptrend, suggesting that the asset is experiencing bullish momentum over the long term. Conversely, if the price is consistently below the 200-day moving average, it points to a downtrend, signaling bearish sentiment.

This moving average can also function as a dynamic support or resistance level. In an uptrend, the 200-day moving average may act as a support level, where the price tends to find a floor and rebound upwards. In a downtrend, it can serve as a resistance level, where the price struggles to move above it. Crossing points, where the price crosses above or below the 200-day moving average, are often viewed as potential signals of a trend reversal.