Forexnext.com - Best Way To Learn Forex Trading

Learn Forex Trading > Day 5 Class > SMA vs EMA

SMA vs EMA

What is the difference between a simple moving average and an exponential moving average?The only difference between these two types of moving average is the sensitivity each one shows to changes in the data used in its calculation.

More specifically, the exponential moving average (EMA) gives a higher weighting to recent prices than the simple moving average (SMA) does, while the SMA assigns equal weighting to all values. The two averages are similar because they are interpreted in the same manner and are both commonly used by technical traders to smooth out price fluctuations.

Simple Moving Average Method
Strength : Display a smooth chart that can eliminate false signal.
Weakness : Slow movement that can cause a not up-to-date trend.

Exponential Moving Average Method
Strength : Moves fast and ideal to display the present price movement.
Weakness : Can give false signals.

So that, Simple Moving Average vs Exponential Moving Average, which one is better? It’s all up to you.

Some forex traders use a combination of several moving average to get profit from both sides. They use a longer period from SMA to recognize the trend’s direction and a shorter from EMA to take the right position.

Click here to Learn Forex Trading in Chennai, Madurai, Trichy, Tirupur, Salem, Karur, Erode, Coimbatore