Indicator "Double Exponential Moving Average": how does it work?

The Double Exponential Moving Average (DEMA) indicator is an advanced version of the standard moving average. Its main difference is increased sensitivity to price changes, allowing it to react faster to market fluctuations. DEMA is calculated using two exponential moving averages, resulting in a smoother curve with smaller lags. This makes it an effective tool for identifying trends and entry/exit points. Traders often use DEMA to enhance their strategies, combining it with other indicators for more accurate signals.