Glossary Term

Exponential Moving Average (EMA)

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Exponential moving averages are a type of technical indicator used by technical analysts to generate trendlines on their charts. An EMA takes an average of the price action that took place over a predefined number of candles (defined by the user) and then plots this average as a line over the existing price action. Exponential moving averages differ from simple moving averages by assigning more weight to recent price action. The trendlines are used to generate signals depending on where the price is in relation to the EMA line. Which can serve as either support or resistance.

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