What defines a centered moving average (CMA)?

A centered moving average (CMA) is defined as a moving average that is calculated over a time period that aligns with the length of the cycle being analyzed, often half the cycle length, and is displaced backwards. This means that the CMA is centered on the current data point and incorporates both past and future data points for a more accurate representation of the trend.

For instance, if the cycle length is 10 periods, the CMA would average the data from the previous 5 periods, the current period, and the next 4 periods to ensure it reflects the trend at the midpoint of the cycle. This characteristic makes it particularly useful for identifying trends and patterns without lagging too far behind current price action, as it incorporates both historical and upcoming data relative to the current point in time.

The other options do not accurately describe the properties or calculation methods of a centered moving average. For example, the notion of a moving average being "always up to date" doesn't reflect the specific methodology of centering. Similarly, a leading signal implies a predictive capability that is not a fundamental aspect of CMAs, which are typically used for trend-following rather than forecasting future movements. Finally, averaging all prices without any adjustment characterizes a simple moving average rather