Moving Averages is one of the most popular ways of identifying the trend. There are basically two types of moving averages i.e EMA and SMA. The SMA is really really simple to calculate. You just need to divide the closing price of the candles by the number of candles. Whereas, The calculation of EMA is a bit tricky. It also uses given numbers of candles but you need to apply some mathematics in the same.
EMA full form Exponential Moving average is a technical chart indicator that tracks the price of investment over time. This indicator is exactly the same as WMA (Weighted Moving Average) that weighs more on the recent price changes. The most important fact we need to remember is that EMA works and reacts much faster than SMA and you can make some good profit out of the same.
How to Setup the EMA indicator at Olymp trade
The best way to understand any indicator is by practising the same in the Olymp Trade practice account. Once you have signed up You will land on the Olymp trade dashboard. Simply click on the Indicator button on the left-hand corner and select the EMA thrice.
Set the EMA to 9, 21, & 55 moving averages. You can also change the colour accordingly. Here, line 55 will be the slowest EMA and line 9 will be the fastest one.
Make buy trade when line 55 is below all
When the three intersects each other and the longest line i.e 55 is below the two lines 9 and 21 then we should consider the market to be in an uptrend and hence we should take a buy trade.
Make sell trade when line 55 is above all
Similarly, when the three lines intersect each other and the longest line i.e line 55 is above the two lines 9 and 21 then, we should consider the market to be in a downtrend and hence, we should take a sell trade.
Moving Averages is one of the simplest and effective ways of finding the trend. There are basically two types of moving averages i.e EMA and SMA. In this article, I have discussed the EMA trading indicator. EMA full form Exponential Moving Average is a technical chart indicator that helps the traders to identify the easy buy and sell opportunities. In this article, I have shared the easy EMA crossover strategy where you need to take a buy trade when the three lines intersect each other and the longest line is below all and similarly, take the sell trade when the longest line is above all.
I personally believe that practice makes everything perfect and I have done my part I have taught you the easy EMA crossover strategy and I will highly suggest you to practice the same strategy in the Olymp Trade practice account and do comment below If this strategy really helped you or not.
Table of Contents