What is the Full Form of EMA in the Share Market?

The EMA full form in the share market is Exponential Moving Average. This is a technical chart indicator that tracks the price changes in the financial instrument over a certain period. EMA puts adequate emphasis on the recent data points and thus responds to price point changes faster. Moving averages cannot predict the changes in the future prices, and can state the changes in the stock trends.

What does EMA indicate?

The Exponential Moving Average can be of great help in determining the direction of the stock trend. When the price dips near and below EMA, investors should consider buying stocks and vice versa. Also, if the EMA rises, it supports the price action positively, reinforcing the strategy to buy when the price is near the moving EMA and selling when the price falls near the EMA.

How to calculate EMA?

In order to calculate EMA, we should first calculate the SMA along with the weighted multiplier of the previous EMA. The SMA is the total closing prices of the stock over time, divided by the number of days. For example, the SMA for 30 days is the sum of the closing prices for the last 30 days divided by 30.