All indicators that use Wilder's smoothing can alternatively use an EMA. So there is no need to go back to an alternative definition for the period as used by Welles Wilder in the 70s for practical purposes. From there on, the current definition of the period of an EMA was used and now is the standard for EMAs. which appeared in the May/June 1984 issue of Technical Analysis of Stocks and Commodities, it was shown that the equivalent of a simple moving average with the period n was obtained by using a smoothing constant 2/(n+1) for the exponential smoothing. With the article by Jack K.Hutson "Filter Price Data: Moving Averages versus Exponential Moving Averages". > use an average that does not bite good-bye when the first element drops out as does the SMA
#EMA VS SMA PC#
> to make as little calculations as possible, as he did not have a PC performing this task back in the 70s, and the exponential smoothing is ideal as you just use the prior value of the average and current price to calculate the new value The point is that Welles Wilder was not really interested in different types of moving averages, but from a practical point of view he looked for a method allowing him The Useless SMMA is indeed identical with Welles Wilder's average.
However, for any number of periods 'n', the outcome is identical to EMA(2 * n - 1). It's conceptually simpler than an EMA, the basic formula being:Īverage = (newValue + priorAverage * (n - 1)) / n Traders may know it as Welles Wilder's Moving Average, as it is the averaging method used in many of his indicators. Wikipedia calls this a 'Modified Moving Average'.
#EMA VS SMA DOWNLOAD#
While I agree it's really quite useless, it is actually the Welles Wilder MA method which makes it an essential ingredient in other indicators such as ADX.įrom my description in the download section: They were just created to waste your time! If anyone has used the Forum SMMA until now, I recommend using the EMA instead.ĭue to its additional lag, the Forum SMMA can better be approximated by an EMA with a slightly increased period, so you would replace the Forum SMMA(8) with an EMA(17), compare this with the EMA(15), which is the identical replacement for the SMMA(8).Īll SMMAs belong to the Garbage Bin. There is no value added, but value reduced. I will also modify my other indicators which produce channels or crosses from various moving averages, not to call the SMMA. NinjaTrader has a nice feature allowing you delete useless and redundant indicators. I do not see any practical value for trading and have no use for them and will not further waste my time with them. Practically, I have no use for the additional lag introduced.Īll SMMAs I have found have either little practical value, or even worse are redundant or misleading. If there is anybody around, who can explain to me, whether the error term is intentional or erroneous, I would like to know. Actually I do not have any argument to use the Forum SMMA in place of the EMA, so it looks redundant to me as well. The outcome is a moving average which closely tracks the EMA, but has some additional lag. This term represents a fraction 1/Period of the difference between SMMA and SMMA. The simple version of the SMMA is similar to the useless one, the NinjaScript formula for the core isĬode Value.Set((1-1.0/Period)*Value - (Value - Value)/Period + Input)/Period) Smoothed Moving Average (SMMA) - DailyFX Forex Forum | FX Forum View topic - SMMA - Smoothed Moving Average (SMMA).
#EMA VS SMA HOW TO#
SMMA (Smoothed Moving Average Series) - Wealth-Lab WikiĮquis International Online Community - How to run this formula up to Metastock?įXCodeBase.COM: Forex Chart Indicators and Development You will find this version of the SMMA for WealthLab, Metastock, MetaTrader 5, FXCM
This is an indicator for the garbage bin. It just uses a false period and cannot be fine tuned to display EMAs with even periods. This means that this SMMA version is indeed completely useless, as it returns the same results as an EMA. For example, the following equalities apply: This formula clearly points to an exponential moving average with the known formula EMA = (k-1)/k * EMA + 1/k * Price,Īnd indeed, the SMMA when used with a Period n returns the same result as an EMA, when used with a period 2*n – 1.
#EMA VS SMA CODE#
Code Value.Set(Value - Value/Period + Input/Period)
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