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Weights 26 periods with exponential decay, capturing the slow-moving component that when paired with a faster EMA exposes momentum divergence.
EMA 26 is a slower exponential moving average, often paired with EMA 12 for MACD calculations.
EMA 26 is a slower exponential moving average, often paired with EMA 12 for MACD calculations.
The calculation:
EMA = (Price × Multiplier) + (Previous EMA × (1 - Multiplier)) Multiplier = 2 / (26 + 1) = 0.0741
Key characteristics:
- Exponential weighting: Recent prices weighted more heavily
- Medium-term view: Roughly 5 weeks of trading in daily data
- Smoother than EMA 12: Less reactive to day-to-day volatility
- MACD component: The slow line in standard MACD calculations
Trading applications:
- MACD calculation: EMA 12 minus EMA 26 equals the MACD line
- Trend confirmation: Slower EMAs confirm trends identified by faster ones
- Crossover strategies: EMA 12/26 crossovers signal momentum shifts
- Support/resistance: Often acts as dynamic support in uptrends
Why 26 periods:
- Historical convention: Originally represented one month of trading (26 days)
- MACD standard: The default slow period for MACD calculations
- Balance: Long enough to filter noise, short enough to be useful
The EMA 26 provides a benchmark for assessing shorter-term price movements. When prices are above the EMA 26, the medium-term trend is generally considered bullish.