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The MACD is constructed from two EMAs, or exponential moving averages, derived from the historical price movement of the asset being studied. In a traditional average, all data is treated equally. When calculating an EMA, some data is given a higher weight, or importance, than other data. I...
The SMA is red, the EMA is blue, the WMA is green, and the SMMA is orange:As you can see on the chart, the exponential and weighted moving averages are faster than the simple moving average, and the smoothed moving average is the slowest of all. The longer the period of any moving...
chart and Acceleration values plotted as a histogram. The velocity line shows how fast the trading instrument grows, and its values above zero indicate a strong bullish trend. The rising velocity line shows that the trading instrument is growing at an ever-increasing speed. At the same time, ...
Exponential Moving Average (EMA)These are moving average share prices. As opposed to the standard average values, the share prices being used to calculate the averages are all weighted differently. This is based on the assumption that the more recent prices have a greater effect on future quotes...
In the above chart of the S&P 500, both potential buy signals would have been extremely profitable, but the one potential sell signal would have caused a small loss. Keep in mind that the 50-day/200-day simple moving average crossover is a very long-term strategy. ...
EMAs are commonly used in conjunction with other indicators to confirm significant market moves and to gauge their validity. For traders who tradeintradayand fast-moving markets, the EMA is more applicable. Quite often, traders use EMAs to determine a trading bias. If an EMA on adaily chartsho...
MACD has a positive value (shown as the blue line in the lower chart) whenever the 12-period EMA (indicated by the red line on the price chart) is above the 26-period EMA (the blue line in the price chart) and a negative value when the 12-period EMA is below the 26-period EMA....
MACD has a positive value (shown as the blue line on the MACD chart) whenever the 12-period EMA (indicated by the red line on the price chart) is above the 26-period EMA (the blue line in the price chart), and a negative value when the 12-period EMA is below the 26-period EMA...
Incontrasting an exponential moving average (EMA) and a simple moving averagethe major difference is the sensitivity each one shows to changes in the data used in its calculation. More specifically, the EMA gives a higher weighting to recent prices, while the SMA assigns an equal weighting to ...