# Exponential Moving Average (EMA)

Exponential Moving Average (EMA) is a moving average indicator which measures the trend direction over a period of time. It places more importance on recent price data than other moving averages like SMA. Unlike other Moving Averages, EMA uses a multiplier which takes into account older data, even if they are outside of the period of days selected.

### **Trading application**

EMA is a line which is shown within the price graph, moving close to the price and eventually intersecting with it. EMA moving above the price indicates a downtrend while EMA moving below the price indicates an uptrend. It can also act as a level of Support/Resistance in uptrends and downtrends, respectively. 

We can interpret buy/sell signals by using 2 different EMA lines (one assessing a shorter period than the other). If the shorter EMA (e.g. a 20 day EMA) crosses upwards over the longer SMA (e.g. 50 days), it is a buy signal. The opposite, where the shorter EMA crosses downwards under the longer EMA, indicates a sell signal. Another interpretation arises when intersecting with the price. A shorter EMA crossing the price from the bottom up, while remaining above the longer EMA, is considered a buy signal in the same way that the shorter EMA crossing the price from above downwards, while the longer EMA is located above the shorter EMA, indicates a sell signal.

### **Calculation**

$$
\[Price - EMA(PreviousDay)] \* Multiplier + EMA (PreviousDay)
$$

*For the first EMA(Previous day) we use SMA.*\
*SMA = sum of X days closing prices / X*\
\&#xNAN;*Multiplier = 2 / (Time periods used + 1 )*

### **Parameters**

#### Input Parameters

| Name        | Type | Range of value    | Description                             |
| ----------- | ---- | ----------------- | --------------------------------------- |
| `emaLength` | int  | <1, int.MaxValue> | Number of bars used in the calculation. |

#### Output Parameters

Indicator ouptuts a single value.

| Type   | Range of value       |
| ------ | -------------------- |
| double | (0, double.MaxValue) |

### Examples

```csharp
// Prints the current value of a 20 period EMA using
// the daily bars close price value.
ema = indicators.EMA(20).OnSeries(dailyBars.Close);
Log("The current EMA value is " + ema.Value.ToString());

// Prints the previour EMA value
ema = indicators.EMA(20).Keep(2).OnSeries(dailyBars.Close);
Log("The previous EMA value is " + ema.Values[1].ToString());
```

#### Complete example

```csharp
using Signals.DataSeries.Bars;
using Signals.Framework;
using Signals.Indicators.EMA;

public class MyStrategy : SingleMarketStrategy
{
    private Bars dailyBars;
    private EMA ema;

    public override void Setup(DataMarketplace data, IndicatorsMarketplace indicators)
    {
        dailyBars = data.Bars(BarPeriodType.Day, 1).WithOffset(25);
        ema = indicators.EMA(20).Keep(2).OnSeries(dailyBars.Close);
    }

    public override void RegisterActions()
    {
        OnUpdateOf(dailyBars).Do(() =>
        {   
            // Prints the current EMA value
            Log("The current EMA value is " + ema.Value.ToString());

            // Prints the previour EMA value
            Log("The previous EMA value is " + ema.Values[1].ToString());
        });
    }
}
```


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