No replies to this topic

[Guru Dudette]

EMA vs. SMA

Exponential (Weighted) Moving Averages vs. The Simple Moving Average.

The latter is calculated by adding the data of the last x days, then dividing the result by x. The average "moves" and changes each day as the oldest value is dropped out of the calculation and the new day's value added in.

An exponentially weighted Moving Average has the additonal advantage of placing more weight on the more recent value, and is calculated with the previous day's values instead of an entire string of values.