Simple Moving Average
V/s
Exponential Moving Average
1)
sensitivity
EMA
is more sensitive to price movement.
SMA
is less sensitive. Eg. If price moves up, EMA will turn up first.
2) Whipsaws
Because of its great sensitivity,
EMA
might produce more false signals than
SMA
when the market is sideways.
3) Signal time
EMA
gives early signals as compared to
SMA
.
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