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> Since the computation for determining lag is the same for both simple
> and exponential averages, why does the exponential average appear to
> have less lag than a simple MA? If you chart a 9 period simple, and a 9
> period exponential on the same price chart, the exponential very clearly
> makes its turns sooner than the simple MA. If this is not showing that
> the exponential MA has less lag than the simple MA, what is it showing?
Mark's example was for a ramp (steadily increasing or decreasing) input,
not for a turn. If you look at the exponential formula and consider what
happens at a turn you will see the following pseudo code is true
regardless of past price history.
if price < XMA[1] then XMA < XMA[1]
if price > XMA[1] then XMA > XMA[1]
That is not always true for a simple average.
So, if the turn is real, an XMA may catch it sooner. However the XMA is
more likely to whipsaw based on a single bar price spike.
--
Dennis
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