The zero lag exponential moving average (ZLEMA) indicator was created by John Ehlers and Ric Way. As is the case with the double exponential moving average (DEMA) and the triple exponential moving average (TEMA) and as indicated by the name, the aim is to eliminate the inherent lag associated to all

trend following Trend following or trend trading is a trading strategy according to which one should buy an asset when its price trend goes up, and sell when its trend goes down, expecting price movements to continue. There are a number of different techniques, ...

indicators which average a price over time. The formula for a given N-Day period and for a given data series is: :

\begin
\textit &= \frac \\
\textit &= \textit+(\textit - \textit(\text)) \\
\textit &= \textit(\textit, \textit)
\end

The idea is do a regular

exponential moving average In statistics, a moving average (rolling average or running average) is a calculation to analyze data points by creating a series of averages of different subsets of the full data set. It is also called a moving mean (MM) or rolling mean and is ...

(EMA) calculation but on a de-lagged data instead of doing it on the regular data. Data is de-lagged by removing the data from "lag" days ago thus removing (or attempting to) the cumulative effect of the moving average.

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{{technical analysis Technical indicators