The Double Exponential Moving Average (DEMA) is a technical indicator devised to reduce the lag in the results produced by a traditional moving average. The DEMA calculation uses two different exponential moving averages, one slow and one fast. The slow EMA smooths out price fluctuations over time, while the fast EMA reacts more quickly to recent changes in price. When both EMAs are combined, they produce a signal that is less affected by lagging prices than traditional MA calculations.The DEMA can be used to identify trend reversals and confirm trend continuation patterns. It is also thought to be less susceptible to whipsaws or false signals than other types of Moving Averages.."It should be noted that like all indicators, the DEMA should not be used in isolation but rather in conjunction with other analysis tools such as chart patterns and volume analysis.
