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Moving Average MA or EMA?

yogibearbullyogibearbull
edited October 2023 in Other Investing
Moving Average MA or EMA?

Simple MA is more common, but exponential EMA is also used by many. Find out about their differences that may or may not be significant in specific situations.
https://ybbpersonalfinance.proboards.com/thread/518/moving-averages-simple-exponential-ema

Edit/Add

(EMA) For n = 50, the 1 st weight is a = 0.0392,…, the 50 th weight is 0.0055.

Compare this to the uniform weights for MA; for n = 50, the weights are 0.02, 0.02,…, 0.02.

So, compared to simple MA, the 1st term of exponential EMA is overweighted by a factor of 2n/(n+1), or by slightly less than 2. Then, the exponential decay in EMA weights follows.

Comments

  • CharlesCharles
    We have both on the premium site. c
  • yogibearbullyogibearbull
    @Charles, thanks. Most sites have both MA & EMA (M*, MFO, StockCharts, Yahoo Finance, etc).

    I tried to explain the differences and when to use them. For short-term trades, EMA (14d, 20d, 50d) may be more useful, but for longer term trades, either is fine, and simple may be better (so, just 200-dMA, etc).
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