Exponential Moving Average

Exponential moving average gives more weight to recent prices, and is calculated by applying a percentage of today's closing price to yesterday's moving average. Exponential moving average - moving average formula: - exponential moving average formula the moving average may be the most widely used indicator by traders, analysts and fund managers. 

Exponential Moving Averages are an integral part of most day trader’s indicator arsenal, and getting two traders to agree on which indicator is the best, or which considerate yields superior results is an argument that will rage on Exponential Moving Average forever.  There is simply no agreement as to exactly what works best-and that is as it should be, because no two traders trade with same mind set and personality by Exponential Moving Average.

The exponential moving average is simply a line that is based on the average of a number of period points. Extra weight is given to the first few points, unlike the simple moving average. The SMA on the other hand has identical weighting on all points.

Simple Moving Average

Investors prefer simple moving averages over the duration of long time periods to identify long-term trend changes. In addition, much will depend on the public figure security in question. A 50-day SMA might work great for suggest support levels in the NASDAQ, but a 100-day EMA may work better for the Dow Transports, for instance. Simple Moving average type and length of time will depend greatly on the individual security and how it has reacted in the past.

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Moving Average Forecasting

Moving Average Forecasting - Are used to emphasize the direction of a trend and to even out price and volume fluctuations, or "noise", that can confuse interpretation. There are seven different types of Moving Average Forecasting:
- Simple (arithmetic) 
- Exponential 
- Time series 
- Weighed 
- Triangular 
- Variable 
- Volume adjusted
The only significant difference between the various types of Moving Average Forecasting is the weight assigned to the most recent data. For example, a simple (arithmetic) moving average is calculated by adding the closing price of the instrument for a number of periods, then dividing this total by the number of times.

Moving Average Crossover

Moving averages can be Crossover – simple - weighted or exponential. In case of simple, all the prices are treated equally whereas in the weighted and the exponential moving averages - recent prices are given more weight so that these moving averages are more responsive to the recent prices as compared to the old ones. These moving averages tend to smooth out the price action that is easier to interpret and understand.