Double Exponential Moving Average (DEMA)

DEMA, introduced by Patrick Mulloy, subtracts the smoothed version of the EMA from twice the EMA. The result tracks price with less lag than the EMA of the same length. It is still a smoothing of closes. The word double does not mean two different periods.

Because the formula extrapolates, DEMA can overshoot price on spikes more than a plain EMA. Faster response and more overshoot are the trade. It will cross price more often if you use it as a trailing line.

Traders who want a responsive average for a crossover, or a tighter trail in a strong trend, use DEMA in place of an EMA. Compare it on the same period before you assume it is "better." Less lag means more false turns in a range.

Nesting a DEMA inside another DEMA and expecting the noise to disappear. You are adding responsiveness, not a filter for ranges.

DEMA does not include volume, range, or the open. A gap can pull it, and it will not tell you the gap was news. It is a close-price smoother with a lag adjustment.