The EMA (Exponential Moving Average) is an exponential moving average that reflects price fluctuations and is calculated exponentially.
Application:
* Identify trends:
* EMA sloping up: Uptrend.
* EMA sloping down: Downtrend.
* EMA is sideways: Trend is moving sideways.
* Create trading signals:
* Short-term EMA cuts long-term EMA from bottom up: Buy signal.
* Short-term EMA cuts long-term EMA from top to bottom: Sell signal.
* Evaluate trend strength:
* The larger the gap between the short-term and long-term EMA, the stronger the trend.
Note:
* Combine EMA with other indicators to increase accuracy.
* Adjust EMA to suit each market type and trading time frame.
* Always manage risks when trading.
