from commsec's tech analysis info:
An indicator is a mathematical calculation that can be applied to a security's pricing data, volume data, or a combination of both. The result is a value that is used to anticipate future changes in price. A moving average fits this definition of an indicator. Moving averages are examples of trend following, or "lagging," indicators. These indicators are superb when prices move in relatively long trends. They don't warn you of upcoming changes in prices, they simply tell you what prices are doing (i.e. rising or falling) so that you can invest accordingly.
Simple Moving Average
The Simple Moving Average is calculated by adding the closing prices for the most recent n intervals of time (or "bars") and then dividing by n. For example, a 21-bar moving average references the closing price of a security over the past 21 bars. The indicator sums all 21 closing prices and divides by 21, which produces the average price over the past 21 bars. The Simple Moving Average gives equal weight to each bar.
Exponential Moving Average
Some market technicians believe that more weight should be attributed to more recent price action. These analysts may prefer to use the Exponential Moving Average because it does just this. An exponential (or exponentially weighted) moving average is calculated by applying a percentage of today's closing price to yesterday's moving average value.
For example, to calculate a 9% exponential moving average of a company, first, we would take today's closing price and multiply it by 9%. We would then add this product to the value of yesterday's moving average multiplied by 91% (100% - 9% = 91%).
The only significant difference between the various types of moving averages is the weight assigned to the most recent data. Once this "weighting" scheme has been determined, it is held static over the range of calculations