Check out what a trader here did https://stockaholics.net/threads/teach-me-technical-analysis.125/#post-210
I'd check out the link posted above, but to put it simply, the SMA is just the average price over the last 200 trading days (as long as your chart is showing daily prices). You don't really "use it" alone, it's more of an indication to show you what's happened over a trading period (in this case 200 days or 50 days). Sometimes it will act as support or resistance, but it's not like it's a guarantee. Sometimes there will be moving average crossovers that can indicate a move up or down, but they're not creating that move, they're just showing you that it happened.
Thank you all for your replies. I understand SMA however on Thinkorswim there is this indicator called DailySMA and I am not sure if that is the same as SMAs because it shows dotted lines by default?
I don't have ToS software anymore, but I'm just spitballing that the DailySMA indicator probably leaves the DAILY SMA on the chart. If you added just SMA, that would change to whatever timeframe you are viewing the chart in. So for example 200 DailySMA would be equal to the 200SMA if you were viewing a normal daily chart, but if you go to the hourly chart, the 200 DailySMA would remain the same, while the 200SMA would update to 200 hours average, instead of days. Make sense? That's just a guess, but you could very quickly test it.
In Think of Swim when you are in the "Edit Studies" to add them bring up the Daily SMA and note the question mark to the right of it. Click on that and it gives you a fairly good explanation of what it is used for. If that is still not clear, their customer service is very good with helping with such things. Just give their 800 number a call.