Triple exponent moving average, or **TEMA** is mostly used by traders and data analysts, who use it to filter out volatility by reducing any large price fluctuation. In this article, we are going to discuss** how to determine a triple exponential moving average in Excel**.

## ๐ Download Excel File

Download the Excel file we used to create this article so you can practice.

## Overview of Moving Average

Moving average indicates the price action or movement of securities, which is often used by merchants and investors to determine the direction of the price of an asset. It allows them to determine the overall trend of the market in a simple way, eliminating short-term fluctuations in the market. Therefore, in finance, it is used in technical analysis.

Again, statistics, it is used to examine data points. It is calculated during a specific period by summing up all data points and dividing the sum by the total number of time periods.

To illustrate it with an example, suppose that over the previous three days, the prices of a product were **$25.5**, **$26.7**, and **$28.5**.

So, the sum of the last prices divided by the period of time is the simple moving average.

simple moving average = **(25.5 + 26.7 + 28.5)/3**=**$26.9**.

Moving averages are classified into two types: simple moving averages and exponential moving averages.

## Overview of Exponential Moving Average in Excel

An exponential moving average actually provides more weight to recent price changes. Therefore, it is more responsive to recent time periods. It works best when, over a long period of time, the presence of a strong trend can be noticed.

So the formula for an exponential moving average is,

**EMA = (Todayโs Price x Multiplier) + (Todayโs Price x (1 โ Multiplier))**

In addition, the multiplier is **2 / (1 + n)**. Where n is the number of periods.

Also, the simple moving average can be used to calculate the exponential moving average.

In that case, yesterdayโs **SMA** can be used instead of yesterdayโs ending price, which is used on the first day of **EMA** analysis.

Although both of these processes of estimating moving averages interpret data in very similar ways, traders prefer the **EMA**.

## Learn to Determine Triple Exponential Moving Average with These 5 Steps in Excel

The Triple Exponential Moving Average (TEMA) and the Exponential Moving Average (EMA) are related in that the TEMA shortens the EMAโs lag, making it easier to use in short-term trading. It uses three smoothed **EMA**s to use the lag difference between various **EMA**s to adjust the **EMA**. Here we have demonstrated how to determine a triple exponential moving average in Excel in five steps. But first, take a look at the dataset that we have used to show you this method.

**Step**

### Step 1: Calculating Simple Moving Average

You should begin by determining the simple moving average. Here, weโll calculate these averages for a 3-day span. So as to accomplish this,

- Select the cell where you are going to do your average. Iโve done this in cell
**D8**, just after the three data points that I am going to**calculate the average**of. - Then, we can sum these data and divide them by the number of periods, or n. But we have used the
**Average function**.

Insert the following formula to determine the simple moving average.

**=AVERAGE(C6:C8)**

Here, weโll average information from cells **C6** through **C8**.

- After that,
**Enter**the formula and use the**Fill Handle**icon.

- Drag it downwards to fill the rest of the cells from
**D9:D17**with their averages of the past three daysโ prices.

**๐ Read More: ****5 Ways to Calculate 7-Day Moving Average in Excel**

**Step**

### Step 2: Estimating Exponential Moving Average 1

Once we have the simple moving average, we can calculate the exponential moving average 1 for today.ย We are going to use the formula.

**EMA = (Todayโs Price x Multiplier) + (Todayโs Price x (1 โ Multiplier))**

But we donโt have yesterdayโs EMA, so we are using the SMA instead.

Follow the below procedure.

- First, we need to figure out the multiplier that will be used in the formula. The formula for determining the multiplier is provided below; the result can be found in cell C19.

**=2 / (1 + n)**

where n is the number of periods.

- Then, in cell
**C8**, enter the following equation.

**=(C8*$C$19)+(D8*(1-$C$19))**

Here, **C8** is the cell where we have stored the price of the last day.

Then,** D8** is the cell number where the simple moving average of the previous three days is stored.

**C$19** is the cell where the multiplier is assigned.

- You must then press Enter on your keyboard before using the Fill Handle icon, which is used to evaluate the remaining cells with the exponential moving average.

- Drag this downwards all the way from
**D9**to**D17**.

**๐ Read More: ****2 Examples to Calculate Centered Moving Average in Excel**

**Step**

### Step 3: Calculating Exponential Moving Average 2

The exponential moving average of 2 is nothing but the exponential moving average of **EMA1**.

The formula that we are going to use:

**EMA2 = (EMA1 x Multiplier) + (EMA yesterday x ( 1 โ Multiplier))**

Again, instead of EMAย yesterday we will use SMA. So follow the procedure below.

- Firstly, select cell
**F8,**where we will calculate the**EMA2**of the previous three days. - In the second step, paste the following equation into cell
**F8**.

**=(E8*$C$19)+(D8*(1-$C$19))**

Here, **E8** is the cell where we have stored the **EMA1**.

Then,** D8** is the cell number where the simple moving average of the previous three days is stored.

**C$19** is the cell where the multiplier is assigned.

- Finally, press
**Enter**from your keyboard, and after that, we have to use the**Fill Handle**icon to evaluate the rest of the cells using the exponential moving average of 2.

- Drag this downwards all the way from
**E9**to**E17**.

**๐ Read More: ****Calculate Displaced Moving Average with Formula in Excel**

**Step**

### Step 4: Computing Exponential Moving Average 3

EMA3, which is the exponential moving average of **EMA2**, can be calculated using the following formula:

**EMA3 = (EMA2 x Multiplier) + (EMA yesterday x ( 1 โ Multiplier)**

Again, instead of the **EMA** from yesterday, we will use the **SMA**.

Follow the process below to learn more.

- To start, select cell
**G8**, where the EMA3 for the previous three days will be calculated. - After that, in the cell
**G8**, type the following formula:

**=(F8*$C$19)+(D8*(1-$C$19))**

Here, **F8** is the cell where we have stored the **EMA2**.

Then,** D8** is the cell number where the simple moving average of the previous three days is stored.

**C$19** is the cell where the multiplier is assigned.

- Then, press
**Enter**from your keyboard, and after that, we have to use the**Fill Handle**icon to evaluate the rest of the cells using the exponential moving average 3.

- Drag this down all the way from
**G9**to**G17**.

**๐ Read More: ****7 Easy Ways to Calculate Average Rating in Excel**

**Step**

### Step 5: Estimating Triple Exponential Moving Average

This is the final step, where we are going to use the previous exponential moving averages to estimate the triple exponential moving average. To do so, we have to use the following formula:

**TEMA = (3 * EMA1) โ (3 * EMA2) + EMA3**

Here, **EMA1** is the exponential moving average.

**EMA2** is the exponential moving average of EMA1.

The **EMA** of **EMA** 2 is **EMA3**.

Letโs follow the process below.

- Firstly, select a cell. Weโve chosen
**H8**and will enter the following formula in that cell.

**=(3*E8)-(3*F8)+G8**

Here, **E8** is the cell where we have assigned the value of **EMA1**.

Then, **F8** is the cell where we have calculated the** EMA2 **and **G8** represents the **EMA3**.

- Finally,
**Enter**the formula, and after that, we have to use the**Fill Handle**icon to evaluate the Triple Exponential Moving Average for the rest of the cells.

- Drag this down all the way from
**H9**to**H17**.

**๐ Read More: ****6 Ways to Solve When Average Formula is Not Working in Excel**

## ๐ Takeaway from This Article

๐ย From this article, you have learned how to determine the exponential moving average and the simple moving average.

๐ย You have also seen how to use these **EMA** and **SMA** to calculate the triple exponential moving average.

## Conclusion

We have demonstrated an Excel procedure for displaying the triple exponential moving average. This process can be very beneficial for businesspeople, as it reduces price fluctuations, making it easier to identify trends without the lag that is normally associated with this process. Therefore, it is the optimal choice for short-term trading. Please leave a comment if you have any suggestions or questions. Donโt forget to visit our **Excelden** page to enhance your Excel-related knowledge.

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