Simple Moving Average (SMA)

What It Is SMA calculates the arithmetic mean of closing prices over a specified number of periods. It smooths out price volatility to reveal underlying trends.

Formula

SMA = (P₁ + P₂ + ... + Pₙ) / n

Where:

• n = number of periods (e.g., 9, 20, 50, 200)

• P = closing price of each period

How It Works SMA gives equal weight to all prices in the calculation window. As new prices come in, the oldest price drops out of the calculation, creating a "rolling" average.

Example Calculation

Given this price data:

Period	Closing Price
1	20
2	22
3	21
4	23
5	24
6	26

5-Period SMA on Period 5:

SMA₅ = (20 + 22 + 21 + 23 + 24) / 5 = 110 / 5 = 22.0

Note: This can only be calculated after Period 5 closes, meaning the result is available on Period 6

5-Period SMA on Period 6:

SMA₅ = (22 + 21 + 23 + 24 + 26) / 5 = 116 / 5 = 23.2

Key Characteristics

• Lag: SMA reacts slowly to sudden price changes because it averages all periods equally

• Smoothness: Provides clean trend lines with minimal noise

• Minimum Data: Requires n periods of data before calculation is possible

Reading Simple Moving Average (SMA) on Supra L1

#[view]
public fun compute_sma(
    pair_id: u32,                                  // Unique identifier of the trading pair
    period: u64,                                   // Number of candles to average [9, 20, 50, 200]
    candle_duration: u64,                          // Duration in milliseconds
    missing_candles_tolerance_percentage: u64      // Max missing candles (two-decimal fixed-point)
): Option<u128>

Returns:

• some(sma) if the indicator can be computed (scaled by DECIMAL_BUFFER)

• none if insufficient history, invalid period, or tolerance exceeded

Parameters:

• missing_candles_tolerance_percentage: Expressed with two-decimal precision (e.g., 5000 = 50.00%, 1000 = 10.00%)

Example:

use supra_oracle::supra_oracle_ti;
use std::option;

// Get 20-period SMA for BTC on 1-hour timeframe with 10% tolerance
let sma = supra_oracle_ti::compute_sma(
    1,            // pair_id (BTC)
    20,           // period
    3_600_000,    // candle_duration (1 hour)
    1000          // 10.00% missing candles tolerance
);

if (option::is_some(&sma)) {
    let sma_value = option::extract(&mut sma);
    // Use sma_value in your logic