Double exponential moving average
A moving average that corrects for the lag of an EMA by combining it with an EMA of itself.
What it shows
Patrick Mulloy designed the DEMA to reduce lag. It takes an EMA, takes an EMA of that EMA, and combines them: twice the first minus the second.
The result follows price more closely than a single EMA, with more overshoot at turns.
How we find it
The same code that draws it on your chart follows these steps, with the same result every time.
- Compute EMA1 = EMA of price over N bars.
- Compute EMA2 = EMA of EMA1 over N bars.
- DEMA = 2 × EMA1 − EMA2.
- Plot it.
Starting values: N 20. These are proposed and will be tuned on real price data before launch.
How to read it
- The line follows price more closely than an EMA of the same length.
- It turns earlier.
- It can overshoot.
Status labels you may see
| Label | What it means |
|---|---|
| Above the average | The last close is above the DEMA. |
| Below the average | The last close is below the DEMA. |
| Crossing | Price crossed the DEMA in the last 3 bars. |
What cancels it
Nothing cancels it.
What traders check next
- Whether it overshoots price at turns.
- How it compares with the EMA of the same length.
- The slope of the line.
Limits
- More sensitive to noise.
- Overshoots at turns.
- Less common.
Try it in forecastviz
- Open any ticker and choose Moving averages → Double exponential moving average in the left menu.
- Switch between 3M, 6M, 1Y to see how the picture changes.
- Compare with Exponential moving average and Triple exponential moving average on the same chart.
Questions
Is it twice as fast?
No. The name refers to the double smoothing. The effect is less lag.
Who made it?
Patrick Mulloy in 1994.
Related trends
Further reading
- Murphy, Technical Analysis of the Financial Markets
- Kaufman, Trading Systems and Methods
- Achelis, Technical Analysis from A to Z
Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.