How to write simple formula for moving average crosses?

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Lola · Accepted Answer

The calculation for EMA puts more emphasis on the recent data points. Because of this, EMA is considered a weighted average calculation.In the figure below, the number of periods used in each average is 15, but the EMA responds more quickly to the changing prices than the SMA. The EMA has a higher value when the price is rising than the SMA and it falls faster than the SMA when the price is declining. This responsiveness to price changes is the main reason why some traders prefer to use the EMA over the SMA.Image by Sabrina Jiang © Investopedia 2020Example of a Moving AverageThe moving average is calculated differently depending on the type: SMA or EMA. Below, we look at a simple moving average (SMA) of a security with the following closing prices over 15 days:Week 1 (5 days): 20, 22, 24, 25, 23Week 2 (5 days): 26, 28, 26, 29, 27Week 3 (5 days): 28, 30, 27, 29, 28A 10-day moving average would average out the closing prices for the first 10 days as the first data point. The next data point would drop the earliest price, add the price on day 11, and take the average.

How to write simple formula for moving average crosses?

1 Answer

1 Answer

How to write simple formula for moving average crosses?

1 Answer

1 Answer

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