Double Exponential Moving Average Crossover

The double crossover method with exponential moving averages uses 2 moving averages calcuated with exponential weighted days (see EMA index crossover for the formula) and takes their cross overs as signal to buy or sell.


				
					Fig. 1 two exponential moving averages and the DAX index

Fig. 1 two exponential moving averages and the DAX index

Figure 1 shows an example of two EMAs, the 150 day exponential average and the 50 day exponential average. The advantage of the exponential weighting formula (more reaction to recent events) combines with the double crossover advantage, that is less (false) signals due to a smoothed base curve.