Simple moving average vs Exponential moving average
Look-alike pair
Full entries: Simple moving average · Exponential moving average.
A simple moving average and an exponential moving average both smooth price data into a single line, but they differ in one decisive way: the simple version weights every period equally, while the exponential version gives more weight to recent prices. That single difference in weighting changes how quickly each line reacts to new information.
Side by side
| Simple moving average | Exponential moving average | |
|---|---|---|
| Weighting | Every period in the lookback window carries equal weight. | Recent periods carry more weight, declining exponentially into the past. |
| Reaction speed | Slower to turn when price changes direction. | Faster to turn, because the newest prices dominate the calculation. |
| Calculation input | Only the closing prices of the chosen window are needed. | Needs a smoothing factor, usually derived from the same window length, plus the prior EMA value. |
| Field mark | A flat, stepped line that shifts only when an old price drops out and a new one enters. | A smoother, more continuously curving line that bends as soon as fresh prices arrive. |
| Common use | Often used where a stable, unweighted average is wanted. | Often used where responsiveness to recent price is wanted. |
| Broker variation | Exact default period and display settings vary by platform and charting package. | Exact smoothing formula and default period vary by platform and charting package. |
Which word to use
Use simple moving average when you want each period in the window treated identically, and exponential moving average when you want the line to give more say to the most recent prices.
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