GlossaryEMA 200

EMA 200

The EMA 200 is an exponential average of the last 200 candles on the chart. It shows the long-term trend and, along with the SMA 200, is one of the most closely watched lines of all.

Calculation

\mathrm{EMA}_t = \alpha\,C_t + (1-\alpha)\,\mathrm{EMA}_{t-1}, \qquad \alpha = \frac{2}{200+1} \approx 0.00995

$C_t$ is the closing price of candle $t$ . The first value is the average of the first 200 closing prices; before that, the line stays empty. After that, each new candle counts for just under 1%. It is calculated on the chart's candles: on the 4H chart over a little more than 33 days, on the daily chart over 200 days. The current candle counts with its current price.

What it is used for

As a boundary between long-term uptrends and downtrends: many traders only go long while the price is above the EMA 200, and only short below it.
On 1H and 4H charts as a trend filter for intraday trading.
As major support or resistance. The first test from above after a long rise gets particular attention.
With the EMA 50 in the Golden Cross and Death Cross.

Settings

Setting	Default	Effect
Length	200	1–500 candles. The menu name stays the same; the line label shows the new length.

Good to know

The start value has a long-lasting effect: 200 candles after the first value, it still makes up about 13% of the line. On a short chart history, the EMA 200 can therefore differ slightly from the value a longer history would give.

Tip You get an EMA on a fixed timeframe, such as 200 days on the hourly chart, with the Exponential Moving Average (EMA) and its Timeframe setting.