**Description**

The Exponential Moving Average (EMA) is a moving average, like the SMA; however, the EMA applies more weight to more recent data, while the SMA applies the same weight to all data in the time periods specified. The weight applied to the most recent price in the EMA depends on how many time periods are being used to compute the moving average. The more time periods used in the moving average, the smaller the weighting of the latest time point.

EMA(n) = m * x(n) + (1-m) * EMA(n-1),

where m is the weight applied to the latest data point (x(n)), given by 2 / (k+1), where k is the number of time periods in the moving average.

**Example**

For example, let’s consider a 3-day EMA.

In this example:

- Number of Periods = 3
- Time Resolution = 1 day

Let’s say we have the past 5 days of ETH/USD close price data: {100, 110, 90, 105, 120}

First, we compute m: 2 / (3+1) = 0.5

First day of 3-day EMA: same as 3-day SMA = (100+110+90)/3 = 100

Second day of 3-day EMA: 0.5*105 + (1-0.5)*100 = 102.5

Third day of 3-day EMA: 0.5*120 + (1-0.5)*102.5 = 111.25

**Graph**

**Formula**