Formula
alpha = 2 / (N + 1)
EMA(first) = SMA of the first N values
EMA = alpha * x + (1 - alpha) * EMA[t-1]How TraderAI calculates it
TraderAI uses the smoothing factor alpha = 2 / (N + 1), with N = 9 on the close by default. The first value is the simple average of the first N prices, and every later value moves a fraction alpha of the way toward the new price. Older prices never drop out completely; their weight shrinks every bar.
Live example
How traders read it
Price above a rising EMA is commonly read as an uptrend, and price below a falling EMA as a downtrend.
Short EMAs such as the 9 or 21 are often used to follow pullbacks in a trend, and crosses between a short and a long EMA as a change in momentum.
The slope of the EMA tells more than a single cross: a flat EMA suggests there is no clear trend.
Limitations
- An EMA still lags price, only less than an SMA of the same length.
- Because it reacts faster, it also gives more false turns in choppy markets.
Settings and defaults
| Setting | Default | Allowed range |
|---|---|---|
| Price source | Close | Open, High, Low, Close, High-low average, Typical price, OHLC average |
| Period | 9 | 1 to 500 |
What it plots
Drawn on the price chart, on the same scale as the candles.
| Line | Unit | Drawn as | First value |
|---|---|---|---|
| Value | Price | Line | after 9 candles |
Calculation notes
- Exponentially weighted average seeded with a simple average of the first window.
Questions
What is Exponential Moving Average?
The Exponential Moving Average (EMA) is a moving average that gives more weight to recent prices. It follows price more closely than a simple average of the same length while still smoothing noise.
How does TraderAI calculate Exponential Moving Average?
TraderAI uses the smoothing factor alpha = 2 / (N + 1), with N = 9 on the close by default. The first value is the simple average of the first N prices, and every later value moves a fraction alpha of the way toward the new price. Older prices never drop out completely; their weight shrinks every bar.
What are the default settings of Exponential Moving Average?
The defaults are Price source: Close, Period: 9. You can change every setting on the live chart.
Can I use Exponential Moving Average for free on TraderAI?
Yes. Every indicator in the library can be added to the free live chart. The free plan keeps up to 2 indicators active at the same time; Pro lets you combine more on one chart.
Educational content. Indicators describe past prices; they do not predict future prices and are not investment advice.