EMA

How do I read EMA?

• Price above the EMA = bullish bias. The line acts as dynamic support during pullbacks.
• Price below the EMA = bearish bias. The line acts as dynamic resistance on bounces.
• Slope direction matters: a rising EMA = uptrend, falling EMA = downtrend. A flattening EMA signals a regime in transition.
• Two-EMA crossovers (9 over 21, or 50 over 200) signal regime shifts. A faster EMA crossing the slower one is the textbook "golden cross" (bullish) or "death cross" (bearish).
• Distance matters: price stretched far above the EMA on a fast move is overextended; expect a pullback toward the line.

How is EMA calculated?

EMA is computed recursively, with each bar's contribution decaying exponentially over time. The smoothing factor α determines how heavily recent bars are weighted versus older ones.

1. 1.Choose a length N (typically 9, 21, 50, or 200).
2. 2.Compute the smoothing factor: α = 2 / (N + 1).
3. 3.Initialize: the first EMA value equals the first close (or an SMA of the first N bars).
4. 4.For each subsequent bar: EMA = (close × α) + (EMA[1] × (1 − α)).
5. 5.The result is a moving average where the most recent bar has the largest weight and older bars decay exponentially.

What are the default EMA settings?

How do I plot EMA in Pine Script?

//@version=5
indicator("EMA Example", overlay=true)

fastLen = input.int(21, title="Fast Length", minval=2)
slowLen = input.int(50, title="Slow Length", minval=2)
src     = input.source(close, title="Source")

emaFast = ta.ema(src, fastLen)
emaSlow = ta.ema(src, slowLen)

plot(emaFast, title="EMA Fast", color=color.blue,   linewidth=2)
plot(emaSlow, title="EMA Slow", color=color.orange, linewidth=2)

Pine's ta.ema() handles the recursive calculation for you, so you don't need to track previous EMA values manually. Plotting two EMAs (a fast and slow length) overlaid on price gives you both trend direction and crossover signals in one indicator. Use overlay=true so the EMAs draw on the same pane as price.

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