Exponential Moving Average

The EMA responds faster than a simple average of the same length and has no drop-off effect, because every past price remains in the calculation with an ever-smaller weight rather than leaving the window abruptly. Faster response means earlier signals and more false ones, which is the same trade-off that governs every smoothing choice. The recursion means an EMA needs a seed value, so two data providers can report slightly different EMAs for the same series depending on where they started. Choosing between SMA and EMA is a preference about responsiveness, not a question with a correct answer.