Exponential Moving AverageThe Exponential Moving Average of a ticker price at any period, is equal to the sum of a percentage %p of the current price together with a (100-p)% of the previous days prices. For the n-day EMA that percentage is 200/(n+1)%. As with the ordinary moving average you can adjust the number of periods n, and offset the line by a another number of periods.
The exponential moving average favors that newer periods over the older periods
as compared with the ordinary or simple moving average. You trade it the same way a the ordinary moving average. When the EMA crosses above the price line its a good time to buy, while when it crosses below it is a good time to sell.
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