Glossary
EMA (Exponential Moving Average)
A moving average that weights recent days more heavily than older ones, so it turns sooner than a plain average of the same length.
A plain moving average treats every day in its window identically: the close from fifty days ago counts exactly as much as yesterday's. An exponential moving average applies a decaying weight instead, so the newest closes dominate and each older day counts for a little less than the one after it.
The practical difference is speed. Over the same number of days, the exponential version follows a turn in the price more closely and the simple version trails further behind it. Neither is a forecast. Both are arithmetic performed on closing prices that have already happened.
This is the average behind the screener's trend filter. Choosing Above 200-day EMA keeps only the companies whose latest price sits above that line, which is a statement about where a price is relative to its own recent history rather than about where it goes next.
Learn this properly
Lesson 11: How to Use a Stock ScreenerA stock screener filters thousands of stocks down to the ones worth researching. Here's how to use one effectively without getting overwhelmed.
Related terms
- Moving AverageThe average closing price over a fixed number of recent days, recalculated daily so it moves along with the price.
- MACDMoving Average Convergence Divergence, a chart indicator built from the gap between two moving averages of price.
- RSI (Relative Strength Index)A chart indicator scoring recent price momentum from 0 to 100 by comparing the size of up days with down days.
- VolatilityHow much a price moves around over a period, in either direction, measured as the size of the swings rather than the destination.
Get the free weekly market digest
The week's biggest movers, every Sunday. No spam.