We can use the **Data analysis** option in excel to calculate an **exponential moving average**. An exponential moving average **(EMA)** places more emphasis on **recent data points** than a simple moving average which considers all observations within a period. The steps below will walk through the process.

*
Figure 1- How to Calculate an Exponential Moving Average in Excel*

**Inserting Data Analysis Option**

If you do not have the Data analysis option, follow these steps:

- Click on
**File,**click on**options,**click on**Add-Ins,**

*Figure 2- Inserting the Data Analysis Option*

- Click on
**Go…**at the bottom of**figure 2** - Check the
**Analysis Toolpak box**and the**Analysis ToolPak- VBA**

* Figure 3- Checking the Analysis Toolpak box and Analysis ToolPak- VBA Options*

- Press
**OK.**

**Setting up the Data**

**We will use the data in Figure 4 to compute the exponential moving average**

* Figure 4 – Setting up the Data*

**Calculating the Exponential Moving Average**

- We will click on
**Data**and then**, Data Analysis**

* Figure 5 – Clicking on Data Analysis*

- We will click on
**Exponential Smoothing**and press**OK**

* Figure 6 – Clicking on Exponential Smoothing*

- On the
**dialog box**, we will click on the**input range**and select**Cell C5 to Cell C12**. We will input the**damping factor**as**0.2**. We will also insert the**output range**(**Cell D5 to Cell D12**) where we want the result to be displayed. We can check the**Chart Output**and**Standard errors****boxes**if we want them displayed. We will press**OK**

* Figure 7 – Inserting the Parameters for Exponential Smoothing*

* Figure 8 – Result of Exponential Moving Average*

**Note**

- If you have no clue on what you want as the
**damping factor**or**smoothing constant**, it is best to leave the box empty

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