Traders debate endlessly whether to use exponential or simple moving averages. The difference is real, but its importance is often exaggerated.
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The practical effect is modest. Over the same period, the EMA turns slightly sooner and hugs price more closely. That means earlier signals and more whipsaws. The SMA is smoother and lags more, giving later signals with fewer false ones.
The SMA has one advantage, which is a clear meaning: it is the average of the last N closes. The EMA's value depends on the entire history, in principle, because each value includes all past data with decaying weights, which makes it harder to replicate exactly across platforms with different data start points.
Self-fulfilling aspects matter too. Certain averages, like the 200-day SMA or 50-day, are widely watched, so reactions near them occur partly because many traders use them. Using the same type as the crowd for those popular lengths makes sense.
A fair approach is to choose one type, test it on your own strategy, and avoid switching back and forth searching for improvement.
If a strategy works only with one type and fails with the other, it is probably fragile.
Practical step: test your strategy with both EMA and SMA of the same length, and compare results.
