Exponential Moving Averages (EMA) In the first task above, w...

In the first task above, we learned about the simple moving average (SMA) or simply known as the MA. Let's recap. MA can be used to identify the trend direction and determine support and resistance levels. The MA is a lagging indicator based on past prices.
An exponential moving average (EMA) reduces the lag by applying more weight to recent prices. So it is more sensitive to recent price changes. The weighting applied to the most recent price depends on the number of periods in the moving average. The weighting drops by half every time the moving average period doubles.
MA vs EMA
EMAs have a weighting applied to recent prices so have less lag and are more sensitive to recent prices and recent price changes. EMAs will turn before MAs. On the other hand, MAs represent a true average of prices for the entire time period. Therefore, MAs may be better suited to identify support or resistance levels. Which one you use depends on your objectives, analytical style and time horizon.
Applications
The applications of EMA is similar to that for MA. I had already discussed that in the link on top. So I shall not repeat.