Exponential Moving Average

In exponential moving average, more weight is given to the current prices than to the historic prices. With the highest weight to the latest price, the weights reduce exponentially over the past prices. This gives the exponential moving average an advantage of being quicker to respond to short-term price fluctuations than a simple moving average. EMA can be calculated with the below-given formula:

EMA = (Closing price-EMA(previous day)) x multiplier + EMA(previous day)