EMA (Exponential Moving Average)
Moving average that weights recent prices more - reacts faster than SMA.
EMA weights recent candles more, so it spots trend changes faster than SMA. Common: EMA 21 (short), 50 (mid), 200 (long). Price above EMA 200 = uptrend. EMA 50/200 cross is the classic signal. Traders often trade bounces off EMA 21 as dynamic support.
In plain words
An average of price over X days but recent days count more - so it picks up mood shifts faster than a plain average. Traders watch: price above EMA 200 = uptrend, below = downtrend.
Example
BTC March 2024: price above EMA 200 (52k) the entire year from Nov 2023 - strong uptrend.
Also known as: exponential moving average