I have been trying to decide which is a better indicator, and although I understand why one would want to put more weight on recent prices to make the moving average more responsive, doesn't that go against the idea of a trendline? I guess my question is why should the recent values hold more weight?
I would think that EMA is better because SMA hits you both coming and going. That is, a price will affect the SMA both as it occurs and then again as it leaves the look-back period. I'm not convinced it has all that much value the second time around. However, I am not very well versed on indicators, so you may do well to wait for other opinions. As for why more recent values should carry more weight than more distant past values, I would think it only makes sense. All else being equal (that is, barring so-called major support or resistance levels), I would think that recent prices have more of a bearing on current price than more distant historical prices. It seems to be a reasonable rule of thumb.
It depends on your goal. If its smoothing the price with minimum lag then the best thing is a jurik ma, t3 ma or hull ma. If its support and resistance intraday then because most traders use emas use emas. If its support and resistance on a daily timeframe then because many big traders use smas use smas.
Perry Kaufman came up with a very unique way to calculate MA's. I read the article well over 10 years ago, but it is definitely worth reading if you use MA's in your trading. I will try to find a link for you. Edit: Here you go........ http://www.google.com/search?hl=en&lr=&q=perry+kaufman+adaptive+moving+average&btnG=Search
One value, I think, of the EMA over the SMA is the EMA calculation compares the closing price to the EMA. Therefore, if the closing price is above the EMA for the first time then the EMA has to turn up. That doesnât necessarily happen with the SMA. The market can close up, but the SMA can continue to go down. If you think of the moving average as smoothing the price action and determining the trend, and if the market tends to have spike bottoms or tops, then the EMA will signal the change in the trend faster than the SMA.