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Moving AveragesIntermediate[ MP.IND.DEMA ]

DEMA

Double Exponential Moving Average

DEMA (Double EMA), developed by Patrick Mulloy in 1994, uses a mathematical formula that incorporates a second EMA to reduce the lag of traditional EMA.

Category
Moving Averages
Difficulty
Intermediate
Markets
All
Timeframe
15M, 1H
Combinations
1 tools
Signals
3 setups
LIVE CHARTDEMA ACTIVE
[ HOW TO READ THE CHART ]
Green Zone: Price above DEMA → Bullish bias (earlier than the equivalent EMA)
Red Zone: Fast DEMA cross above Slow DEMA → Long signal earlier than the EMA Golden Cross
Main Line: Fast DEMA cross below Slow DEMA → Short signal
Confluence: Combine DEMA with RSI for maximum probability
[ WHAT TO WATCH ON THE CHART ]
Observe how DEMA behaves relative to key price points. Note moments when the indicator reaches extreme levels and how price reacts. Look for divergence patterns between the indicator and price movement.
[ FORMULA ]
DEMA = 2 × EMA(N) - EMA(EMA(N))
Subtracts the EMA of the EMA to reduce the lag of a single EMA

What signals does DEMA generate?

Price above DEMA → Bullish bias (earlier than the equivalent EMA)
Fast DEMA cross above Slow DEMA → Long signal earlier than the EMA Golden Cross
Fast DEMA cross below Slow DEMA → Short signal

What is DEMA and how does it work?

DEMA (Double EMA), developed by Patrick Mulloy in 1994, uses a mathematical formula that incorporates a second EMA to reduce the lag of traditional EMA. It's more reactive than EMA but less extreme than HMA. The formula subtracts the lag of the double EMA, resulting in a moving average that responds almost twice as fast to price changes compared to the EMA of the same period.

How do you use DEMA in trading?

Used exactly like EMA but with the advantage of earlier signals. The cross of two DEMAs (fast and slow) anticipates the cross of traditional EMAs. Excellent for trend following on medium timeframes where EMA lag is significant.

What are the strengths of DEMA?

Significantly less lag than EMA
Earlier cross signals
Suitable for trend following on 1H-4H

What are the limitations of DEMA?

Less known: less self-fulfilling
More false signals in sideways than EMA
Still lagging in very fast markets
[ RELATED CONTENT ]
Indicators:EMA
Glossary:Golden Cross
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