An exponential moving average (EMA) is a type of moving average that attributes greater weight and significance to more recent data points.
The exponential moving average is also referred to as exponentially weighted moving average.
An exponentially weighted moving average reacts more significantly to recent price changes than a simple simple moving average (SMA), which applies a weight equal to all observations in the period.
Like all moving averages, this technical indicator is used to produce buy and sell signals based on crossovers and deviations from the historical average. Traders often use different EMA lengths, such as 10-day, 50-day and 200-day moving averages.
This indicator has difference of the classical EMA allows to visualize on the same diagram the moving average of different time frames allowing to have more precise confirmations on the variations of price.
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