61 Exponential Moving Average (EMA)

The Exponential Moving Average (EMA) is a specific type of moving average that points towards the importance of the most recent data and information from the market. The Exponential Moving Average is just like it’s name says - it’s exponential, weighting the most recent prices more than the less recent prices. The EMA can be compared and contrasted with the simple moving average.

It can be used with the BIAS indicator to show divergencies and crossovers as signals.

Figure 9.7: Exponential Moving Average