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Double Exponential Moving Average (DEMA)

The DEMA is a measurement of a security's moving average that gives greater weight to recent price data. Like the exponential moving average (EMA), it reacts more quickly to price fluctuations compared to a simple moving average (SMA), providing greater value to short-term traders seeking to identify trend changes.

A price turning upward with an EMA that turns late and a DEMA that follows the turn more closely. A bracket measures the lag of the EMA.
DEMA combines an EMA with the EMA of itself to cut the lag.

By creating a moving average of a security's moving average, oscillations are more effectively eliminated. Doubling the EMA increases the magnitude of the line, making peaks sharper and valleys deeper. The DEMA thus reflects a moving average while keeping pace with daily changes.

Formula: DEMA = (2 * EMA(n)) - (EMA(EMA(n)))

where: n = period

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