Glossary
EMA: meaning, example and why it matters
Exponential moving average: a moving average of price that gives more weight to recent candles, so it reacts faster than a simple average. Short EMAs (such as 25 or 30) track recent moves and long EMAs (such as 100 or 200) show the broader trend.
Worked example
For a 3-period EMA the weight on the newest price is 2 ÷ (3 + 1) = 0.5. With a previous EMA of 100 and a new close of 106, the new EMA is 0.5 × 106 + 0.5 × 100 = 103.
Illustrative numbers for explanation only. They are not market data, a forecast or a suggestion.
Why it matters
An EMA reacts faster than a simple average because recent prices count for more, which is why short and long EMAs are compared on charts.
Related terms
See it in practice
Frequently asked questions
Is a shorter EMA better than a longer one?
Neither is better. A shorter EMA follows price closely and changes direction more often; a longer one is smoother and slower.
Is this page investment advice?
No. EMA is explained in general terms with illustrative numbers. Market Dekho is not a SEBI-registered Research Analyst or Investment Adviser.
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Educational content, not investment advice. Market Dekho is not a SEBI-registered Research Analyst or Investment Adviser. Spotted a mistake? Email marketdekho01@gmail.com.