Exponential Moving Average (EMA)

EMA - Exponential Moving Average is similar to a simple moving average, except that more weight is given to the latest data. Exponential Moving Average is also known as "exponentially weighted moving average".

EMA - Exponential Moving Average

EMA - Exponential Moving Average is a type of moving average that is similar to a simple moving average, except that more weight is given to the latest data. The Exponential Moving Average is also known as "exponentially weighted moving average".

 


Exponential Moving Average Formula

The Exponential Moving Average is calculated as follows:



Exponential Moving Average Application

The Exponential Moving Average is recognized by many as being the most reliable of the moving averages. The EMA is more responsive and less susceptible to whipsaw in moving average crossover strategies.

The progressive weighting makes the Exponential Moving Average immune to the "bark twice" scenario: once at the start of the moving average period and again in the opposite direction, at the end of the period.


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