Moving Averages
Simple vs. exponential moving averages, how crossovers are used, and why moving averages lag by construction.
Chapter 1 of 2
INTERMEDIATESimple vs. exponential moving averages
A simple moving average (SMA) is the plain arithmetic mean of the last N closing prices. An exponential moving average (EMA) also averages recent prices, but weights the most recent data more heavily, so it reacts faster to new price action than an SMA of the same length.
Crypto Radar's own strategy layer uses EMA20 and EMA50 specifically for this responsiveness -- see the live example below, drawn from real current market data.
Real, unmodified public market data, shown for educational purposes only. This is not personalized investment advice and is not a signal to act.
Quick Check
Why does an EMA react faster to new prices than an SMA of the same length?