Moving Average Exponential

The moving average may be the most widely used indicator. The Exponential Moving Average (EMA) indicator calculates and plots an exponentially weighted average of prices, specified by the Price input, from each of the most recent number of bars specified by the Length input. This method of calculating a Moving Average gives greater weight to the market’s most recent price and a reduced weighting to older prices. (A simple moving average gives equal weight to all the prices in the series.) A moving average is generally used for trend identification. Attention is given to the direction in which the average is moving and to the relative position of prices and the moving average. Rising moving average values (direction) and prices above the moving average (position) would indicate an uptrend. Declining moving average values and prices below the moving average would indicate a downtrend. A displaced moving average plots the moving average value of a previous bar or later bar on the current bar. This indicator is NOT displaced by default. Changing the input Displace to positive number displaces the plot to the left. Changing the input Displace to a negative number displaces the plot to the right.

Calculations

EMA = (Close[0] x Exp%) + ( EMA[1] x (1-Exp%) )

Where,

EMA – Value of Exponential Moving Average

Close[0] – Today’s Close price

Exp% - The chosen exponential percentage

EMA[1] – Yesterday’s EMA value

Default Parameters

Default value of Length is 10.

Main Page

Risk Disclosure: Futures and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one's financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.

Testimonial Disclosure: Testimonials appearing on this website may not be representative of the experience of other clients or customers and is not a guarantee of future performance or success.