moviefoki.blogg.se

For the same moving average length, the EMA gives the last price a weight of 5.1% and uses 94.87% of the previous bar’s value.

These formulas show two interesting things: With these variables, what value do the EMA and RMA have? Say we have a 40-bar moving average whose previous bar value was 26.00. Because its current value uses more recent data than the RMA does. In fact, the weight EMA uses can be almost double of what RMA uses (see table above).Īs a result, the EMA responds faster to changes in price. How much of the current value the average uses depends on alpha.īecause EMA has a higher alpha value than RMA, the EMA gives more weight to the last price. So what does that mean?īoth EMA and RMA calculate their average by taking the previous bar value and increasing that with the current bar’s value. To better see their difference, let’s compare alpha values for various moving average lengths: Lengthįor any moving average length from 5 to 40 bars, the table above shows that EMA uses a higher alpha value than RMA does. This makes RMA’s alpha roughly half of what the EMA uses. The RMA, on the other hand, uses 1 / length. The EMA calculates that alpha with: 2 / (length + 1).

It tells what impact the last value has on the moving average’s entire value. This variable determines how much weight the most recent price gets. ‘Alpha’ value comparisonīoth the EMA and RMA use an alpha variable in their formula. Their only difference is the alpha variable. TradingView calculates the Exponential Moving Average (EMA) as follows:Īnd for the Relative Moving Average (RMA) TradingView uses this formula:Īs we can tell, both formulas are much alike. That also shows the one thing in which they differ. To see why the EMA and RMA are much alike, let’s consider their formulas. Let’s take a closer look at how these two moving averages compare. TradingView’s Exponential Moving Average (EMA) and Relative Moving Average (RMA) are calculated in almost the same way.