Hi all,
I am trying to calculate the EMA of a certain share. So far so good (I have the right formula etc.).
My question: what value do I use as the first EMA? After all I MUST start somewhere... For the first calculation I tried 0 as the EMA of the first day but that distorts my calculation.
Any ideas?
thanks!
2006-11-13 09:22:19 · 3 answers · asked by Micron 2 in Business & Finance ➔ Investing
StockCharts has a good writeup on their calculation, including a sample EXCEL spreadsheet that does the actual calculations:
http://stockcharts.com/education/IndicatorAnalysis/indic_movingAvg.html
However, in regards to your specific question -- you start out with a simple moving average for the specified time period and then apply the exponential algorithm from there...
2006-11-13 11:03:32 · answer #1 · answered by Randy H 4 · 0⤊ 0⤋
This Site Might Help You.
RE:
How to calculate the Exponential Moving Average?
Hi all,
I am trying to calculate the EMA of a certain share. So far so good (I have the right formula etc.).
My question: what value do I use as the first EMA? After all I MUST start somewhere... For the first calculation I tried 0 as the EMA of the first day but that distorts my calculation....
2015-08-19 07:56:50 · answer #2 · answered by Mark 1 · 0⤊ 0⤋
The most important indicator is price itself. Price is not derived from moving averages, the moving average is derived from the price. Moving averages are great as a guide. Moving averages are great for smoothing out volatility to improve your staying power in a trend. A SMA or EMA has a 50% delay to price. For example if you took a 20 day SMA and moved it 10 days to the left of price, it would roughly mirror the stock price. I try and using price supports when a stock spirals up. I only use a MA as an alternative stop-loss if a stock fails to show reasonable support when rising.
2016-03-16 05:47:17 · answer #3 · answered by ? 4 · 0⤊ 0⤋
1
2017-03-01 07:41:41 · answer #4 · answered by ? 3 · 0⤊ 0⤋
It doesn't really matter, as long as you realize that the EMA of n days needs at least n days to settle down.
Therefore if you want an n day EMA, take f=2/(n+1). Then
EMA (t+1) = (1-f) EMA (t) + f Close (t+1).
For EMA(0) use Close(0), i.e. the close of the first day you have in your database.
2006-11-13 22:38:44 · answer #5 · answered by cordefr 7 · 1⤊ 0⤋