Description
An exponential moving average (EMA) is a type of moving average that gives greater weight and significance to more recent data points.
The exponential moving average is also referred to as the exponentially weighted moving average.
An exponentially weighted moving average reacts more significantly to recent price changes than a simple moving average (SMA), which applies equal weight to all observations over the period.
Like all moving averages, this technical indicator is used to produce buy and sell signals based on crossovers and divergences from the historical average. Traders often use different EMA lengths, such as 10-day, 50-day, and 200-day moving averages.
This indicator differs from the classic EMAs and allows you to view the moving average of different time frames on the same graph, allowing you to have more precise confirmations of price changes.