Option Investor
Glossary

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Exponential Moving Average

This is a method used to create an average for a price by weighting recent data more heavily. By applying a percentage of the current day's closing price to the previous day's moving average calculation, this type of price averaging can offer a more current assessment of a price movement's trend. This is different from a simple moving average, which records each day's price equally, with no weighting of the more recent levels.