How to Use Exponential Moving Averages (EMAs) | Lecture 3 | Full Course
How to Use Exponential Moving Averages (EMAs) Lecture 3
A technical indicator called the Exponential Moving Average (EMA) is used in trading to demonstrate how the price of a security or commodity changes over a predetermined amount of time. The EMA differs from a simple moving average in that it emphasises recent data points more heavily (i.e., recent prices).
The goal of all moving averages is to determine, based on previous prices, the direction in which the price of a security is trending. Exponential moving averages are hence lag indicators. They merely indicate the pattern that the stock price is following; they do not forecast future values.
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