
Ema formula how to#
How to use the Exponential Moving Average (EMA)?Įxponential Moving Averages (EMA) allow you to get a sense of the real trend of an asset by looking at a smoothened version of the price action in the chart. That's because the exponential moving average is reacting much more quicker and giving more weight to those recent price changes. Both are very similar, but can you see how the red (EMA) line responds much quicker to large price changes and also how when we reach the right side of the chart we can clearly see a bigger gap between the two lines when we're faced with strong price action? Now, look at the red line (EMA) in comparison to the blue line (SMA). The rest of the table is rinse and repeat the formula. The 27.4 value which is the first one in the SMA column it's the starting point for our EMA calculation, remember, you don't have it on the first one so you need to use the SMA as your first value. So our SMA and EMA Calculations are based on 5 days of data (closing prices).

Notice how we chose the selected period to be 5. You can do it yourself also using any spreadsheet software! In the table below, you'll find 30 days worth of price data. Example of Exponential Moving Average Calculation So on the next day the EMA Previous day value you see on the formula should be 10.134. That's our first EMA point and now for the next points it's easier as we already have the previous EMA calculated. What's our Exponential Moving Average value? Easy:


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