Exponential Moving Average
Definition of Exponential Moving Average
Exponential Moving Average = (K x (CP - PP)) + PP
C: Current Price of stock, currency, commodity, etc. P: The EMA of preceding periods K: Exponential smoothing constant
A Simple Moving Average (SMA) is used to calculate the value of the first period. Furthermore, the EMA can be used to identify support and resistance areas. However, it may not be optimal for identifying precise entry and exit points.
Related Terms
Liquidity Risk
Bond Market
Reverse Stock Split
Portfolio
Equilibrium Price
Ichimoku Cloud
- TenkanSen: The short-term indicator
-
KijunSen: The long-term indicator
- Uptrend: If the price is above the cloud
- Downtrend: If the price is below the cloud
- Neutral: If the price is in the cloud

