How to use exponential moving average (EMA) in trading #crypto .
1. What is exponential moving average (EMA)?
💠
EMA stands for Exponential Moving Average, also known as exponential moving average.
💠
The formula for calculating the EMA line can be written as follows:
EMAt = (EMA(t-1) * (1 - K) + Vt * K)
💠
In which:
- EMAt: EMA value at the current time (t)
- EMA(t-1): EMA value at the previous time (t-1)
- Vt: Closing price of the asset at the current time (t)
- K: Multiplier
- N: EMA period
+ Multiplier K is calculated as follows:
K = 2 / (N + 1)
(In general, EMA is similar to MA, but the most recent trading sessions are calculated with a higher coefficient, the further trading sessions are calculated with a lower coefficient.)
2. How to use EMA in trading:
💠
When the price line is above the EMA, it indicates an uptrend. When the price is below the EMA, it indicates a downtrend.
💠
When the short-term EMA is above the long-term EMA, it indicates an uptrend. When the short-term EMA is below the long-term EMA, it indicates a downtrend.
