Overlap Studies
Double Exponential Moving Average (DEMA)
Double Exponential Moving Average
Deep Dive
Everything You Need to Know
Under the Hood
How It Works
DEMA is calculated using two exponential moving averages to create a faster-responding MA: DEMA = 2×EMA(n) - EMA(EMA(n)). This double application reduces lag significantly compared to a single EMA of the same period. Developed by Patrick Mulloy, DEMA maintains the smoothness of EMAs while improving responsiveness to price changes. With a default 30-period, DEMA reacts faster to trends than a standard 30 EMA. It's not just twice as fast as an EMA - the formula actually reduces lag even more.
In Practice
How Traders Use It
Cryptocurrency traders use DEMA for faster trend identification with less lag than standard EMAs. DEMA crossovers (short DEMA crossing long DEMA) generate earlier signals than EMA crossovers. When price crosses above DEMA, it signals bullish momentum; crossing below signals bearish. DEMA is particularly effective in fast-moving crypto markets where EMA lag causes missed entries. Combine DEMA with momentum indicators like RSI for confirmation, or use multiple DEMA periods for crossover strategies. It's popular among active traders and scalpers needing responsive moving averages without excessive noise.
Highlights
DEMA at a Glance
- Formula: 2×EMA(n) - EMA(EMA(n))
- Significantly faster response than standard EMA
- Reduced lag while maintaining smoothness
- Default 30-period calculation
- Ideal for fast-moving crypto markets
- Developed by Patrick Mulloy
- Used for crossover strategies and trend following
- Popular among active traders and scalpers
- More responsive than EMA, smoother than price
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FAQ
Frequently Asked Questions
What is the Double Exponential Moving Average (DEMA) indicator?
Double Exponential Moving Average
How does DEMA work?
DEMA is calculated using two exponential moving averages to create a faster-responding MA: DEMA = 2×EMA(n) - EMA(EMA(n)). This double application reduces lag significantly compared to a single EMA of the same period. Developed by Patrick Mulloy, DEMA maintains the smoothness of EMAs while improving responsiveness to price changes. With a default 30-period, DEMA reacts faster to trends than a standard 30 EMA. It's not just twice as fast as an EMA - the formula actually reduces lag even more.
How do traders use DEMA in their strategies?
Cryptocurrency traders use DEMA for faster trend identification with less lag than standard EMAs. DEMA crossovers (short DEMA crossing long DEMA) generate earlier signals than EMA crossovers. When price crosses above DEMA, it signals bullish momentum; crossing below signals bearish. DEMA is particularly effective in fast-moving crypto markets where EMA lag causes missed entries. Combine DEMA with momentum indicators like RSI for confirmation, or use multiple DEMA periods for crossover strategies. It's popular among active traders and scalpers needing responsive moving averages without excessive noise.
What are the key points to know about DEMA?
Formula: 2×EMA(n) - EMA(EMA(n)) Significantly faster response than standard EMA Reduced lag while maintaining smoothness Default 30-period calculation Ideal for fast-moving crypto markets Developed by Patrick Mulloy Used for crossover strategies and trend following Popular among active traders and scalpers More responsive than EMA, smoother than price
Can I use DEMA with Cryptorobot.ai?
Yes. Double Exponential Moving Average (DEMA) is available as a built-in indicator in Cryptorobot.ai. You can add it to any automated strategy using the no-code strategy builder, backtest it against historical data, and deploy it live on supported exchanges.