Knowledge Base/What is an Exponential Moving Average (EMA)?

What is an Exponential Moving Average (EMA)?

Exponential Moving Average (EMA) is a technical indicator that is similar to the Simple Moving Average (SMA) but places greater weight on more recent data as it is considered more relevant or important.

The weighting given to the most recent price is greater for a shorter-period EMA than for a longer-period EMA. Since the EMA calculation gives more weight to the most recent data, it “hugs” the price action more closely and reacts more quickly than the SMA.


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