Day 4 of break

Chiong finish the fundmanager report. Dunnoe can qualify for semi-finals or not. Must really give in my best shot for my MC and Econs mid-term next week.

I must mug and stop being distracted. Urgh.

Exponential Moving Average-EMA

EMA is similar to the SMA except that more weight is given to the latest data. They are used to create indicators like the moving average convergence divergence (MACD). The EMA assigns more weight to the more recent price data and assigns less importance to the older price data. The best thing is that the weighting can be varied.

Because of this, EMA reacts quicker to price changes as compared to a SMA. On average, the EMA is 3/8 of a point closer to the price than SMA. The EMA calculation is a bit more complex and i won't attempt to go into details here. A simple google search will allow you to find out how it is calculated.

The kind of MA to use depends on your trading preferences. SMA lags behind EMA, but it is better at identifying long term trend changes. EMA is preferred to some traders because it captures price changes quicker. Because EMA is more sensitive, it often gives more signals. Although this can be good, more signals will invariably increase the chance of going into a market via a false signal. SMA gives less signals and is more reliable, but it also means that it will be late in giving out bullish signals.

If one is using chart nexus, one can simply change your SMA to a EMA by ticking on the box "exponential".