Here's What You Need to Know About Moving Averages
One of the signs of the beginning of a bullish trend is the golden cross — a crossover between two moving averages. The shorter-period moving average (closer to the price) crosses above the longer-period moving average (farther from the price).
When this happens, it could be a signal to consider buying or opening a long position, especially if supported by candlestick confirmation. The target is usually set higher than the previous high.
Case Study:
STEEMUSDT
The price began trading above the EMA 20 (white line) and EMA 50 (pink line), then the EMA 20 crossed above the EMA 50 — forming a golden cross.
But instead of entering immediately, you should wait for a price retracement back to the EMAs, allowing them to act as support (also known as dynamic support, since EMAs move with price).
In this case, a bullish engulfing candlestick pattern appeared right at the EMAs. The confirmation level is at 0.1303, which means the price needs to close above this level to validate the bounce from the EMAs. The invalidation level is below the bullish engulfing candle — at 0.1270.
Target prices:
You might be wondering: How do I choose which target to aim for?
Let me explain — the main target is 0.1802 – 0.1887 because it’s above the previous high (in a bullish trend, price tends to form higher highs).
Then why include 0.1570 – 0.1632? Even though we aim for the higher target, we still need to be cautious of potential resistance in that zone. Once the price hits that level, observe how it reacts.
If there’s a significant rejection or price drop, consider reducing your position to secure profits. But if the price keeps pushing up with strong momentum, let the profits run.
So in this case, 0.1570 – 0.1632 acts more like a level of awareness rather than a fixed take-profit target.
Let me know what you think about this post!
Would love to hear your thoughts and how I can support your trading journey with more technical insights or educational content like this. 🙌
One of the signs of the beginning of a bullish trend is the golden cross — a crossover between two moving averages. The shorter-period moving average (closer to the price) crosses above the longer-period moving average (farther from the price).
When this happens, it could be a signal to consider buying or opening a long position, especially if supported by candlestick confirmation. The target is usually set higher than the previous high.
Case Study:
STEEMUSDTThe price began trading above the EMA 20 (white line) and EMA 50 (pink line), then the EMA 20 crossed above the EMA 50 — forming a golden cross.
But instead of entering immediately, you should wait for a price retracement back to the EMAs, allowing them to act as support (also known as dynamic support, since EMAs move with price).
In this case, a bullish engulfing candlestick pattern appeared right at the EMAs. The confirmation level is at 0.1303, which means the price needs to close above this level to validate the bounce from the EMAs. The invalidation level is below the bullish engulfing candle — at 0.1270.
Target prices:
- Target I: 0.1570 – 0.1632
- Target II: 0.1802 – 0.1887
You might be wondering: How do I choose which target to aim for?
Let me explain — the main target is 0.1802 – 0.1887 because it’s above the previous high (in a bullish trend, price tends to form higher highs).
Then why include 0.1570 – 0.1632? Even though we aim for the higher target, we still need to be cautious of potential resistance in that zone. Once the price hits that level, observe how it reacts.
If there’s a significant rejection or price drop, consider reducing your position to secure profits. But if the price keeps pushing up with strong momentum, let the profits run.
So in this case, 0.1570 – 0.1632 acts more like a level of awareness rather than a fixed take-profit target.
Let me know what you think about this post!
Would love to hear your thoughts and how I can support your trading journey with more technical insights or educational content like this. 🙌
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.