Moving Average Exponential
Trend, EMA
- What it shows
Exponential Moving Average gives more weight to recent prices. A shorter period responds more quickly and is more sensitive to short price moves.
- How it is built
Each new value is a share of the latest close plus the rest from the previous value. The share is 2 / (N + 1), so a short length reacts faster.
- How to use it
- Reacts earlier than the simple average, with more false turns in a choppy market.
- Often used as dynamic support or resistance in a trend.
- Two of them with different lengths are read by their crossing.
Related indicators
Smoothed Moving AverageSupertrendIchimoku CloudParabolic SAR