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Glossary · Pro tools

Exponential moving average (EMA)

An average price that counts recent days more than older ones.

Why it matters

Because recent prices weigh more, an EMA turns sooner than a simple average when the trend changes. Short EMAs (9, 21 days) suit traders; long ones (100, 200) show the big trend.

How to read it

Price above a rising EMA is an uptrend. Two EMAs crossing (a fast one over a slow one) is a common trend signal, with the same lag trade off as any average.

Also called: EMA, weighted moving average, WMA

Related

Moving averageThe average closing price over a set number of days, drawn as a line.Golden crossThe 50-day average price crossing above the 200-day average.MACDMomentum shown as the gap between a fast (12-day) and a slow (26-day) average of the price.

In the Cluenex app, this explanation opens next to every exponential moving average (ema) figure, with the live reading for the stock you are looking at. Open it in Cluenex