When to Use Simple vs. Exponential Moving Averages?

Moving Averages are a key indicator in the technical analysis toolkit. When should you use simple vs. exponential moving averages? We'll explain both approaches, how they react differently to price changes, and why both could be helpful in different scenarios.

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Dave helps active investors and financial advisors make more informed investment decisions, inject more discipline into their investment process, and enrich relationships with their clients. Feel better about making better decisions!

He's also President and Chief Strategist at Sierra Alpha Research LLC, a boutique investment research and consulting firm focused on managing risk through market awareness. He combines the strengths of technical analysis, behavioral finance, and data visualization to identify investment opportunities and enrich relationships between advisors and clients.

Dave was previously a Managing Director of Research for Fidelity Investments in Boston, a Past President of the Chartered Market Technician (CMT) Association, and started in the financial industry just after the March 2000 market top at Bloomberg in New York.

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#MarketMisbehavior

[SnoopFroggNFT]

Thanks for making this video. I know that it takes a lot of time to do these!

[Aleamanic]

I like this format better, Dave, compared to your StockCharts persona. Similar interesting content, but personally prefer the more no-nonsense, less overproduced content. 👍

[CC-yqbw]

My issue with EMA's is they tend to just trace price action. The lower you go the more noticeable it becomes and as this occurs you literally lose sight of the actual trend which defeats the entire purpose of using a moving average.

[mimbaxter]

Thanks Dave, that was another useful set of lessons. I will need to digest the cultural importance of the 50 and 200 sma. I get it, but it reminds me of the comment about company culture, that it is like gravity, you are not aware of it until you jump. On the ema/ sma, I just went 'that cross is a signal'.

[MidChild]

Thank you for the info! Just about to start trading so I’m glad to have found a person who is able to elaborate as you do 👍🏽

[seandeburca]

Exponential moving average appears to make the most use case sense, thank you for the continuing education Dave. Malcom Gladwell's 'Outliers' suggests I have only 9, 900 more hours required to achieve mastery of my charts...onwards we go!

[fonty]

thanks for the video, super helpful!!

[FuturesBrizio]

I use a 50 smooth. I think ema and sma are to sensitive. The smooth can give delayed trend change signals but it often holds the trend better in chart and is better for seeing end of corrections . Though I think a 200 sma might be worthwhile on a higher time frame.

[miked]

What about WMA…? Weighted moving averages…? You think that is better for day trading than EMA..? I use SMA for longer term looks and WMA for intraday…?

[AndersonChao-vszf]

I saw many people using ema for short term day trade

[AndersonChao-vszf]

I'm about 3 years of experience maybe little new so my understood is sma little slower speed than ema might be good for long term but if you're day trader or short term then i think ema should be make more sense i might be wrong