{"id":2208,"date":"2013-02-28T15:36:14","date_gmt":"2013-02-28T15:36:14","guid":{"rendered":"http:\/\/blog.thehotpennystocks.com\/?p=2208"},"modified":"2013-04-09T11:36:24","modified_gmt":"2013-04-09T11:36:24","slug":"exponential-moving-average","status":"publish","type":"post","link":"\/learn\/exponential-moving-average\/","title":{"rendered":"Exponential Moving Average"},"content":{"rendered":"

With\u00a0<\/span>simple averages<\/b>\u00a0the calculation is, well, simple. The simplicity of the calculation can sometimes cause a bit of a flaw to the\u00a0<\/span>SMA<\/b>. The flaw is due to spikes in the price of a security.<\/span><\/p>\n

For example, if you were to calculate the 4 day\u00a0SMA<\/b>\u00a0of stock XYZ where its closing prices were, $2.90, $2.95, $3.00 and $2.95 the\u00a0SMA<\/b>\u00a0would work just fine and smooth the price out to $2.95. Great, that sounds and looks about right.<\/p>\n

In comes trouble, in our second example stock XYZ has a huge news event on day 2. Its closing prices over this 4 day span are $2.90, $4.95, $3.25, $3.15. See the large spike on day 2? That would cause the 4 day\u00a0SMA<\/b>to average the price out to $3.56, which is a bit high.<\/p>\n

\"moving<\/p>\n

The\u00a0exponential moving average<\/b>\u00a0to the rescue! With the\u00a0EMA<\/b>\u00a0the calculation is a bit more complex in that it weighs the different closing prices within the moving average range. The\u00a0EMA<\/b>\u00a0gives more weight to prices near the end of the range and less to those prices in the beginning of the range. This gives more influence to the current market activities of the stock. Which as you know, what is happening\u00a0now<\/i>\u00a0in the market is what is most important to pay attention to.<\/p>\n

Moving Averages : Table of Contents<\/h3>\n
    \n
  1. Introduction<\/a><\/li>\n
  2. Simple Moving Averages<\/a><\/li>\n
  3. Exponential Moving Averages<\/a><\/li>\n
  4. SMA vs. EMA<\/a><\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    With\u00a0simple averages\u00a0the calculation is, well, simple. The simplicity of the calculation can sometimes cause a bit of a flaw to the\u00a0SMA. The flaw is due to spikes in the price of a security. For example, if you were to calculate the 4 day\u00a0SMA\u00a0of stock XYZ...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[],"yoast_head":"\nExponential Moving Average - The Hot Penny Stocks<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/exponential-moving-average\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Exponential Moving Average - The Hot Penny Stocks\" \/>\n<meta property=\"og:description\" content=\"With\u00a0simple averages\u00a0the calculation is, well, simple. The simplicity of the calculation can sometimes cause a bit of a flaw to the\u00a0SMA. The flaw is due to spikes in the price of a security. For example, if you were to calculate the 4 day\u00a0SMA\u00a0of stock XYZ...\" \/>\n<meta property=\"og:url\" content=\"\/learn\/exponential-moving-average\/\" \/>\n<meta property=\"og:site_name\" content=\"The Hot Penny Stocks\" \/>\n<meta property=\"article:published_time\" content=\"2013-02-28T15:36:14+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2013-04-09T11:36:24+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/www.thehotpennystocks.com\/Learn-To-Trade\/images\/moving-averages-sma-ema.gif\" \/>\n<meta name=\"author\" content=\"learnstocks\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"learnstocks\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"\/learn\/exponential-moving-average\/\",\"url\":\"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/exponential-moving-average\/\",\"name\":\"Exponential Moving Average - The Hot Penny Stocks\",\"isPartOf\":{\"@id\":\"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/#website\"},\"datePublished\":\"2013-02-28T15:36:14+00:00\",\"dateModified\":\"2013-04-09T11:36:24+00:00\",\"author\":{\"@id\":\"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/#\/schema\/person\/d9b297ef0bc2139b978604d35d9d0908\"},\"breadcrumb\":{\"@id\":\"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/exponential-moving-average\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/exponential-moving-average\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/exponential-moving-average\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Exponential Moving Average\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/#website\",\"url\":\"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/\",\"name\":\"The Hot Penny Stocks\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/#\/schema\/person\/d9b297ef0bc2139b978604d35d9d0908\",\"name\":\"learnstocks\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/99d75270f9f2f3105a341bb35cbe86ef?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/99d75270f9f2f3105a341bb35cbe86ef?s=96&d=mm&r=g\",\"caption\":\"learnstocks\"},\"url\":\"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/author\/learnstocks\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Exponential Moving Average - The Hot Penny Stocks","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/exponential-moving-average\/","og_locale":"en_US","og_type":"article","og_title":"Exponential Moving Average - The Hot Penny Stocks","og_description":"With\u00a0simple averages\u00a0the calculation is, well, simple. The simplicity of the calculation can sometimes cause a bit of a flaw to the\u00a0SMA. The flaw is due to spikes in the price of a security. For example, if you were to calculate the 4 day\u00a0SMA\u00a0of stock XYZ...","og_url":"\/learn\/exponential-moving-average\/","og_site_name":"The Hot Penny Stocks","article_published_time":"2013-02-28T15:36:14+00:00","article_modified_time":"2013-04-09T11:36:24+00:00","og_image":[{"url":"http:\/\/www.thehotpennystocks.com\/Learn-To-Trade\/images\/moving-averages-sma-ema.gif"}],"author":"learnstocks","twitter_misc":{"Written by":"learnstocks","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"\/learn\/exponential-moving-average\/","url":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/exponential-moving-average\/","name":"Exponential Moving Average - The Hot Penny Stocks","isPartOf":{"@id":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/#website"},"datePublished":"2013-02-28T15:36:14+00:00","dateModified":"2013-04-09T11:36:24+00:00","author":{"@id":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/#\/schema\/person\/d9b297ef0bc2139b978604d35d9d0908"},"breadcrumb":{"@id":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/exponential-moving-average\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/exponential-moving-average\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/exponential-moving-average\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/"},{"@type":"ListItem","position":2,"name":"Exponential Moving Average"}]},{"@type":"WebSite","@id":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/#website","url":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/","name":"The Hot Penny Stocks","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/#\/schema\/person\/d9b297ef0bc2139b978604d35d9d0908","name":"learnstocks","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/99d75270f9f2f3105a341bb35cbe86ef?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/99d75270f9f2f3105a341bb35cbe86ef?s=96&d=mm&r=g","caption":"learnstocks"},"url":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/author\/learnstocks\/"}]}},"_links":{"self":[{"href":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/wp-json\/wp\/v2\/posts\/2208"}],"collection":[{"href":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/wp-json\/wp\/v2\/comments?post=2208"}],"version-history":[{"count":2,"href":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/wp-json\/wp\/v2\/posts\/2208\/revisions"}],"predecessor-version":[{"id":2304,"href":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/wp-json\/wp\/v2\/posts\/2208\/revisions\/2304"}],"wp:attachment":[{"href":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/wp-json\/wp\/v2\/media?parent=2208"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/wp-json\/wp\/v2\/categories?post=2208"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/learn-to-trade.thehotpennystocks.com\/learn\/wp-json\/wp\/v2\/tags?post=2208"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}