For Business

Indicators

SMA vs EMA: Which to Use

A simple and an exponential moving average are the same closes counted two ways: equally, or with the newest days counting most. This paper shows you both twenty-day lines on gold's real daily candles of 2025 — how far each sat from the price and which turned first — the idea as a heavy flywheel and a light wheel on one shaft, the two on the daily chart, the weights that are the whole difference, and the tooltip that tells the two lines apart on your platform.

Difficulty
Beginner
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

This paper is locked

Read it in the browser and keep the PDF with Premium, or buy this one paper.

Buy this paper — $1Get Premium

The same closes, two lines

A simple moving average and an exponential one are the same closes counted two ways. Both lines over gold's candles are twenty-day averages. The gold line counts every day equally; the blue line counts today most and each older day a little less. At the 22 April 2025 high the close was 3380.62, the blue line was 197 dollars under it and the gold line 227. After the high the blue line turned down on 1 May and the gold line on 12 May. Closer and quicker against smoother and later, every day of the year.

A flywheel and a light wheel

The picture is two wheels on one shaft. One is a heavy flywheel: push the shaft and it changes pace slowly, and once it is turning it keeps turning. The other is a light bicycle wheel: push, and it answers at once, and it slows as quickly. The shaft is the price, turning both. The flywheel is the simple average, steady and late; the light wheel is the exponential, quick and twitchy. Neither wheel knows the road ahead.

This paper is locked

Read next