Exponential Moving Average |
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More emphasis is placed on recent elements in the period by using an exponential moving average (EMA). The formula for the EMA is shown below.   A percentage is applied to the current price and one minus the percentage is applied to the previous day's moving average. This is the exact formula which is used by the SysGen Moving Average Indicator.
This results in the weighting shown in the graph on the right. Notice how the elements toward the right of the graph are much larger than those on the left. The higher bars carrying more weight are the more recent elements.
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