![Compare simple moving and exponential moving average indicators](https://expert-metatrader.com/wp-content/uploads/2021/10/photostudio_1633266165788.png)
Now that you are familiar with both simple and exponential moving average indicators, you are probably wondering which one is better?
Simple or exponential moving average?
First, let’s start with the exponential moving average.
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When you want a moving average that responds quickly to price movements, a short-term EMA is the best option.
These types of moving averages help you get trends very quickly (we’ll talk more about that later), which can definitely lead to more profit. In fact, the sooner you catch a trend, the longer you can ride it and reap the benefits (yes!).
The disadvantage of using the moving average is that they can be misleading during price stabilization periods (hey!).
Because this moving average responds to price very quickly, you might think that a trend is taking shape while it may just be a spike.
Simple moving average moves slower
When you want a smoother moving average that responds to slower price movements, a longer SMA is the best solution.
This works well when viewing longer time frames, as it can give you an idea of the overall trend.
Although it is slow to respond to price movements, it can probably save you a lot of misleading and fake things.
The downside is that it may delay your work too much and you may miss out on such a good price to enter into a good deal.
A convenient analogy to understand the difference between the two is to consider them as rabbits and turtles.
Compare simple moving and exponential moving average indicators
Turtles are slow like SMAs, so you may miss a timely ride.
However, shells and varnishes are tough to protect themselves, and using SMAs can help protect you from misleading and fake items.
Rabbits, on the other hand, are as fast as the EMA. That helps you get started, but there’s also the risk of being misled by misleading (or snoozing like a rabbit in the middle of work).
When to use SMA and when to use EMA ?
So which one is better?
In general, on moving averages, the longer the time interval, the slower the reaction to price movements.
But when everything else is the same, the EMA tracks the price more accurately than the SMA.
For this reason, the moving average is usually more suitable for short-term trading.
The same characteristics that make EMA more suitable for short-term trading limit its effectiveness and advantage in long-term trading.
Because the EMA moves faster than the SMA, it is often not ideal for signaling entry and exit points at “slower” intervals such as daily (or higher).
The SMA, which has delays, tends to smooth out price movements over time and makes it a good indicator of a trend, allowing you to stay in the buying position when the price is higher than the SMA and when the price is below SMA is on sale.
So finally SMA or EMA?
The decision is really yours.
You do not need to limit yourself to one type of MA or one sample MA.
Many traders draw several different moving averages to represent both sides of the story.
They may use a simple moving average with a longer time interval to detect the overall trend and then use a shorter moving exponential moving average to find the right time to open the position.
Numerous trading strategies have been developed to use moving averages. In the following lessons, we will teach you the following:
- How to use moving average to detect trends
- How to use multiple moving averages together
- How can moving averages be used as dynamic support?
So go back a little and lean! Go find a chart and play a little with Moving Origins!
Try different types of them. Experiment with different time intervals. Over time, you will find out which Mooring Origins work best for you.
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