SMA, Simple Moving Average, is simply the average closing prices of the last x bars. So a 200SMA would be the average of the last 200 closing prices. Its what you would get of you added up all the 200 closing prices and divided that total by 200.
But how important is a difference in a closing price 200 bars back? Surely a change in the last bar is more important than a change in a bar 200 bars ago?
So, the EMA, Exponential Moving Average, is derived in the same way, but its calculation adds more weight to the more recent closing prices. Therefore, maybe it is more useful, as EMA’s as a line on a chart therefore tend to turn upwards from a low earlier than an SMA, and downwards from a high earlier too.
But in practice, they’re pretty much equivalent, as long as you decide on on e or the other and don’t mix SMA and EMA,they’re both as useful as each other (which actually isn’t very).