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

RSIMACD

See it in practice

Stock screenerScreen by EMA

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.