Technical Signals ยท Lesson 2.2
SMA vs EMA
Simple and exponential moving averages both smooth price. They differ in how much weight they give to the most recent days.
Simple moving average (SMA)
An SMA gives equal weight to every day in its window. A SMA_50 is the plain average of the last 50 closing prices.
Exponential moving average (EMA)
An EMA gives more weight to recent prices, so it turns sooner when a trend changes. The trade-off is that EMAs whipsaw more in choppy markets.
| Property | SMA | EMA |
|---|---|---|
| Weighting | Equal across the window | Heavier on recent days |
| Reaction speed | Slower | Faster |
| Best for | Long-term trend filters | Reactive entry / exit signals |
| FactorSage fields | DAILY_SMA_*, WEEKLY_SMA_* | DAILY_EMA_*, WEEKLY_EMA_* |
Related
- EMA crossoversTechnical Signals
- Price above SMA 200Technical Signals
- EMAGlossary