#TradingTypes101

What is the Exponential Moving Average (EMA)?

🔴 The Exponential Moving Average (EMA) is one of the technical analysis indicators used to determine the overall market trend and reduce the impact of price noise. It is characterized by giving greater weight to recent prices compared to the Simple Moving Average (SMA), making it more sensitive to recent price movements.

🔴 Components of EMA:

🔴 Time Frame: Different periods can be used such as EMA 9 or EMA 20 for the short term, and EMA 50 or EMA 200 for the long term.

🔴 Price Sensitivity: The shorter the time frame, the more sensitive the EMA is to price movements.

🔴 Trend Line: EMA helps determine the overall market trend, where the price above the EMA is a bullish signal, and below it is a bearish signal.