The Exponential Moving Average remains the most common moving average on the financial markets. However, it will not include the oldest periods : its information is therefore limited in time. ![]() The Weighted Moving Average, unlike the WMA, assigns a more refined value to the selected periods. Nevertheless, many experienced investors use it in their strategy in addition to other tools. Since it does not assign a coefficient to the periods studied, it is easier to interpret and offers fewer false buy and sell signals, but also less flexibility in the face of price volatility. The Simple Moving Average - also known as "Classic" - is preferred by novice investors seeking a simple and easy-to-read tool. There are three main types of Moving Average. Exponential, weighted or simple : which Moving Average should you choose ? Conversely, the most recent prices will gain weight in the interpretation of this technical indicator. It is therefore thanks to it that the oldest prices will have a relatively less significant value. Good to know : In the formula for calculating the M multiplier, you will see that the higher the number of periods taken into consideration, the lower it will be. Unlike the SMA (Simple Moving Average), the Exponential Moving Average thus obtained will be expressed as a percentage and not as an absolute value. The formula for calculating the Exponential Moving Average is as follows : MME = MME + M x (Price - MME)
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