✓ Mathematical
◆ The PatternWeights recent prices more heavily using an exponential smoothing factor: multiplier = 2/(N+1).
The Exponential Moving Average applies an exponential smoothing factor that weights recent prices more heavily.
Multiplier k = 2 / (N + 1)
EMA = (Close − EMA_prev) × k + EMA_prev
EMA = (Close − EMA_prev) × k + EMA_prev
Because each new EMA is built on the previous, all past prices influence the result — but their weight decays exponentially.
Key pair: The 12-period and 26-period EMAs form the foundation of the MACD indicator.
More responsive than SMA to sudden price changes — preferred in faster-moving markets.
Pattern bridge: Exponential weighting of recent data is exactly how Adam’s momentum tracks gradient history.