Exponential Weighted Average EMA

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Definition of 'Exponential Weighted Average EMA'

The EMA is the Exponential Weighted Average. Some traders, rarely, refer to this as the XMA.

This is a type of moving average (MA) that gives more weight (and hence importance) to the most recent prices. It does this in an exponential manner and hence the name. EMA's are frequently used in other indicators such as the very popular Moving Average Convergence Divergence (MACD) indicator.

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