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The formula for calculating EMA is:
EMA = (Ptoday x K) + (EMAyesterday x (1-K))
where K = 2/(N+1)
Ptoday = price today
EMAyesterday = yesterday's EMA
N = number of days chosen
For a 10 day EMA, K = 2/10+1 = 0.18
Calculate the simple moving average, SMA, for the first N days (10
in this example).
On the N+1 day (eleventh), multiply the closing price by K.
Multiply the previous day's SMA by
(1-K). Add the two together, the result is the EMA. Repeat this
step each day for the day's EMA
Good luck and good trading,
Ray Raffurty
-----Original Message-----
From: BL <blee3@xxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Sunday, December 20, 1998 4:57 PM
Subject: Help w/ Exponential Moving Average
>I am attempting to match MetaStock's exponential moving average in an Excel
>spreadsheet (attached). The problem I have is matching my starting EMA
>value to the MetaStock EMA value. Everything else works fine. It is my
>understanding that the intial EMA value should tie to the Simple moving
>average calculation and then the preceding EMA values thereafter. Any
>assistance would be greatly appreciated. Thanks.....
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