![]() The chart above shows the 200-day EMA in green and the 200-day SMA in red. EMAs react quicker to price moves and are often closer to the current price after a strong directional move. This reduces the lag, but does not completely remove the lag. ![]() Moreover, the lag increases along with the length of the moving average.Īn exponential moving average (EMA) puts more weight on recent prices and less weight on older prices. The first price point, which is 200 days ago, counts just as much as the most recent price point. A 200-day simple moving average is simply an average of closing prices for the last 200 days. The first two articles covered Advance-Decline Percent and High-Low Percent.īefore getting into this breadth indicator, it will help to clarify the difference between an exponential moving average and a simple moving average. This indicator is part of a breadth trio I use to define the market environment and keep me on the right side of the trend. I will then show how to use the Stocks Above 200-EMA indicator to measure trend participation. ![]() This article will start by explaining the differences between a simple moving average and exponential moving average. ![]() Even though not all indexes, ETFs and stocks test well against the 200-day moving average, we can still use this moving average as a benchmark level to measure trend participation. The humble moving average remains one of the most popular methods for trend identification and the 200-day moving average is perhaps the most common timeframe. Introduction - Measuring Trend Participation SystemTrader // Introduction - Measuring Trend Participation // 200-day EMA versus 200-day SMA // Backtesting the Moving Averages // Percent above 200-day Breadth Indicator // Smoothing and Reducing Whipsaws // Capturing Broad Market Participation // Conclusions on Trend Participation // Stocks Above EMA Symbols at StockCharts ////. ![]()
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