📊 TECHNICAL
Double Exponential Moving Average (DEMA)
A reduced-lag moving average by Patrick Mulloy (1994) that blends a single EMA with an EMA-of-the-EMA to track price more closely than a standard EMA of the same length.
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Live Demo — Double Exponential Moving Average (DEMA) applied to NIFTY 50 (illustrative)
PriceEMA(9)EMA(21)SMA(20)
What is DEMA?
Introduced alongside TEMA in Mulloy's 1994 article. DEMA sits between a plain EMA and a TEMA in responsiveness and smoothness, using two layers of exponential smoothing combined algebraically to reduce lag.
Formula
EMA1 = EMA(Price, n)
EMA2 = EMA(EMA1, n)
DEMA = 2*EMA1 - EMA2Parameters
| Parameter | Default | Description |
|---|---|---|
| Period (n) | 20 | EMA length applied at both smoothing passes |
| Source | Close | Price field used |
Signal Interpretation
- Price crossing DEMA is a lower-lag substitute for a standard EMA crossover.
- A slope change flags a potential shift in short-term trend direction.
- Fast DEMA crossing a slower EMA/SMA generates a directional trade signal.
- Overshoots less than TEMA on sharp reversals but trails price more.
Tips & Best Practices
- Use where you want less lag than an EMA but more stability than a TEMA.
- Combine with support/resistance or an oscillator to confirm crossovers.
- Longer periods work well as a trend filter; shorter periods suit active intraday entries.