An exponential moving average (EMA), sometimes also called an exponentially weighted moving average (EWMA), applies weighting factors which decrease exponentially. The weighting for each older data point decreases exponentially, giving much more importance to recent observations while still not discarding older observations entirely. The graph at right shows an example of the weight decrease. It’s a trend following indicator and is calculated like so:

EMA = Price(t) * k + EMA(y) * (1 - k)
t = today, y = yesterday, N = number of days in EMA, k = 2/(N+1)

Exponential Moving Average

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This article is about how to calculate exponential moving average.

The Exponential Moving Average gives the recent prices an equal weighting to the historic ones.
Forex Exponential Moving Average Based Systems
The simple moving average formula does not weight recent price movements like its sister the exponential moving average.
The Exponential Moving Average can be used as a crossover system. For a crossover system, you may insert three different Exponential Moving Averages. Generally, the lengths for these Moving Averages are short, intermediate, and long term. A commonly used system is 4, 9, and 18 intervals or periods. An interval may be in ticks, minutes, days, weeks, or months; it is a function of the chart type.

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Moving Averages work best in trending markets. A buy signal occurs when the short and intermediate term averages cross from below to above the longer term average. Conversely, a sell signal is issued when the short and intermediate term averages cross from above to below the longer term average. You can use the same signals with two Moving Averages, but most market technicians suggest using longer term averages when trading only two Exponential Moving Averages in a crossover system. Another trading approach is to use the current price concept. If the current price is above the Exponential Moving Averages, you buy. Liquidate that position when the current price crosses below either Moving Average. For a short position, sell when the current price is below the Exponential Moving Average. Liquidate that position when the current price rises above the Exponential Moving Averages.

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It doesn't really matter, as long as you realize that the EMA of n days needs at least n days to settle down.
Therefore if you want an n day EMA, take f=2/(n+1). Then
EMA (t+1) = (1-f) EMA (t) + f Close (t+1).

For EMA(0) use Close(0), i.e. the close of the first day you have in your database.

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Forex Trading > Moving Average Based Indicators > Exponential Moving Average

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Exponential Moving Average - Formula

EMA weights N=15

Taken from Wikipedia

As you use Exponential Moving Averages, do not confuse them with Simple Moving Averages. An Exponential Moving Average behaves quite differently from a Simple Moving Average. It is a function of the weighting factor or length of the average.