What is an EMA?

There are two popular types of moving averages;

#1: Simple Moving Average (SMA)

#2: Exponential Moving Average (EMA)

The reason the exponential moving average or EMA is so popular with many traders is because it focusses more on the recent price than the simple moving average does.

Where the SMA is just averaging the price out over a certain period, the EMA adds more weight into the recent price when forming.