Exponential Moving Average Filters
Exponential moving average filters (EMA) are another common type of filter used to filter price data for stocks, bonds and other assets. EMAs are infinite impulse response filters where the current filtered output is dependent upon all of the previous price values. With the EMA filter the impact of earlier data on the current filtered value falls off at an exponential rate. The exponential decay of the impact of earlier data may be fast or slow and is characterized by the