A moving average derived from a double moving average as well as a
Overview
Developed by Patrick Mulloy and introduced in the February 1994 issue of Technical Analysis of Stocks & Commodities magazine, the Double Exponential Moving Average (DEMA) was designed to lessen the lag of a regular exponential moving average. It is a composite of a single exponential MA and a double exponential MA that produces less lag than its two components individually; it is NOT a moving average of a moving average.
As Patrick Mulloy explains: “the DEMA is not just a double EMA with twice the lag time of a single EMA, but is a composite implementation of single and double EMAs producing another EMA with less lag than either of the original two.”
A 55-period DEMA in the USD/CAD 4H chart 4/12/2011
Source: VT Trader
Interpretations and applications of the DEMA are similar to those used on all moving average type indicators.
