Here's an overview of the simple and exponential moving averages and the potential trading techniques concerning them.
When it comes to the simple and exponential moving averages and the question of which is better, you can see that in the graphic above that there appears to be little difference between the two. Normally, the EMA will change sooner than the SMA because it emphasizes the more recent activity more than the older activity. But in this case there really is not much of a difference.
New traders will play with both tools to find out which one they find to be better, and use that one in their trading approach. But the reality is that it is unlikely that one moving average will give you winning results if the other does not. Short-term traders have made the 10-day EMA popular based on its use by some famous traders. But the only judge to what type of moving average to use is your account balance from month to month. If it helps your trading, then keep it – and if it does not help your trading, then look to replace it.Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors.
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