A moving average that gives recent prices more weight
The exponential moving average is a type of moving average that weights recent prices more heavily than older ones. Compared with a simple moving average, which counts every day equally, it reacts sooner to a change in direction but also to small wiggles. MACD is calculated from two of these lines.
On a day the close jumps from $1,000 to $1,100, a 20-day simple average rises only $5, while a 20-day EMA rises about $10.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.