Glossary
Exponential moving average (EMA)
A moving average that gives more weight to recent prices, so it reacts faster than a simple moving average of the same length.
An exponential moving average updates each period by moving part of the way from its previous value toward the latest price. The share it moves is set by a multiplier, usually 2 ÷ (N + 1), where N is the number of periods.
Because recent closes count more, an EMA turns sooner than a simple moving average of the same length. The trade-off is that it also reacts more to short, noisy moves.
The 12- and 26-period EMAs are the building blocks of the MACD indicator, and the 20- and 50-period EMAs are common on daily charts.
Related terms
For education only, not financial advice. Crypto assets and stocks are volatile, and leveraged positions can lose more than the money you put in.