trend indicator
Exponential Moving Average (EMA)
EMA is a moving average that gives more weight to recent prices, making it more responsive to new information than a simple moving average.
Formula
EMA_today = (Price_today × K) + (EMA_yesterday × (1 - K)) where K = 2 / (N + 1), N = period length
Common strategies
- EMA crossover: Fast EMA (9 or 21) crossing above slow EMA (50 or 200) is bullish; below is bearish.
- Dynamic support/resistance: Price bouncing off the 200 EMA in an uptrend.
- EMA ribbon: Multiple EMAs (8,13,21,34,55,89) stacked to visualize trend strength.
How CommonQuant uses it
CommonQuant pre-calculates EMA(9), EMA(21), EMA(50), and EMA(200) on all timeframes. DSL strategies can reference ema(period) for any of these.
Frequently asked questions
EMA vs SMA — which is better?
EMA reacts faster to price changes, making it better for short-term trading. SMA is smoother and better for identifying long-term trends. See our /compare/ema-vs-sma page for a detailed comparison.
What is the 200 EMA?
The 200-period EMA is widely watched as a bull/bear divider. Price above the 200 EMA is considered a bull market; below is a bear market.