Interpreting EMA Periods for Intraday Candles

Summary

A moving average period counts observations in the data series being used. For a five-period EMA calculated from 15-minute candles, the period refers to five candles, not five calendar days. The candle interval therefore determines the time span represented by the indicator: changing from 15-minute candles to another bar size changes how much elapsed time a five-period average covers.

The answers also clarify that traders may explicitly name a longer calendar horizon, such as a five-day moving average, while calculating it from intraday bars; that requires translating the desired horizon into the number of bars in the chosen session schedule. The document does not give a universal conversion because the number of bars per day depends on trading hours and the instrument. It also notes that, absent another qualifier, “moving average” commonly refers to a simple moving average, while an exponential average is typically identified explicitly. The discussion explains period labeling, not the profitability or predictive value of EMA signals.

Key ideas

• A moving average period counts data observations, such as candles, in the series used for the calculation.
• A five-period EMA on 15-minute bars uses five candles, regardless of how many candles are collected overall.
• To represent a calendar-day horizon with intraday bars, convert the desired duration using the market's bar schedule.
• The elapsed time covered by a period changes when the candle interval changes.
• Unless specified otherwise, moving average often refers to a simple moving average; exponential form is usually named explicitly.

Tags

# How to calculate 5 EMA


# How to calculate 5 EMA












I am trying to understand the basics of finance indicators. I have made 15 minute ohlc candles for the past 50 days.

Now if I try to calculate `5EMA`, my doubt is what does 5 refer to? Is it days of number of candles or number of days? Assuming 6 hour trading session, I will have 1200 candles (50 days, 6 hours each day,15 min candles ). So, if I say my period is 5, is it number of candles or number of days?

If it is number of days (which I am usually coming acroos various tutorials, how do I convert these days to number of candles?)

Please don't branch off the discussions whether EMA is profitable or not.

Thanks

## Answer by John (score 2, accepted)

https://quant.stackexchange.com/a/54378

it is the number of candles, it is always in reference to the candle unit you are using.

## Answer by chrisaycock (score 1)

https://quant.stackexchange.com/a/54386

Without any other qualifications, the number for a moving average is the number of periods. In your case, it's the number of 15-minute baskets/candles.

As a contrast, traders will sometimes mention a "five-day moving average" even when using 30-minute intraday baskets. I knew a market maker who insisted on EMAs using tick data.

Another note: unless the "exponential" is explicit, generally assume it's a simple moving average.

Shown in full with attribution under the source's licence. Licence: CC BY-SA 4.0 (Stack Exchange)

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.