EMA is a lagging trend indicator. It is used to smooth the price data by eliminating noise and thus identifying trends, with more weightage to recent values.
The EMA technical indicator calculation is cumulative and includes all the data with decreasing weights. Past values have a lower contribution to the average, while recent values have a greater contribution. The further away the value, the smaller the contribution. Thus, EMA is a moving average that is more responsive to recent changes in the data.
The EMA technical indicator is not like the SMA technical indicator, where each value in the time period carries equal weight and values outside of the time period are not included in the calculation.
EMA is widely used in technical analysis. It is also used for calculating other technical indicators, either in combination with itself or other indicators, with the same or different time periods.
A recursive formula for calculating EMA...
