Glossary term
Exponential Moving Average
A moving average that gives more weight to recent observations.
An exponential moving average, or EMA, smooths a time series like price while reacting faster to recent changes than a simple average. Trend-following strategies often compare a short EMA with a longer EMA to measure momentum.
Example: If the 21-day EMA is above the 63-day EMA, a stock may be in a short-term uptrend.