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Moving Averages

MOVING AVERAGE | 4 Efficient Methods To Apply Hey traders, The moving average is one of the most popular technical indicators. It is applied in stocks/forex/crypto trading and proved its high level of efficiency. There are hundreds of trading strategies based on MA. In this post, we will discuss the 4 most popular ways to apply the moving average. 1️⃣The first method is applied to identify the market trend. While the price keeps trading above the MA, one considers the trend to be bullish and looks for buying opportunities. Once the price starts trading below the MA, the trend is considered to be bearish and a trader is looking for shorting opportunities. 2️⃣The second method applies the combination of 2 MA's: preferably a long-term one and a short-term one. The point is that once a short-term moving average crosses above a long-term MA, with high probability it signifies the initiation of a bullish trend. Alternatively, a crossover of short-term and long-term MA's to the downside indicates a start of a bearish trend. 3️⃣The third method applies MA as a structure. While the moving average is lying above the price, it is considered to be a dynamic resistance. Staying below the price it serves as a strong dynamic support. Perceiving MA as the structure, one applies that for trade entries. 4️⃣The fourth method is aimed to track the crossover of the moving average and the price. The idea is that a bullish violation of the MA by the price gives an early signal for a possible trend reversal. While a bearish breakout of the MA by the market indicates a highly probable bullish trend violation. Backtest different MA's inputs and learn to apply that for predicting the future direction of the market and for trading it. Do you use MA? ❤️Please, support this idea with like and comment!❤️
COINBASE:BTCUSDEducation
by VasilyTrader
17
An introduction to the MACD indicatorHere is my quick and dirty introduction/explanation of what the Moving Average Convergence Divergence (MACD) indicator………… indicates. The Moving Average Convergence Divergence (MACD) is a trend following momentum indicator that follows the intimate relationship between a 12-Period EMA and a 26-Period EMA on a price chart in whatever timeframe you are in. The MACD indicator is made up of 6 parts, the MACD Line, the Signal Line, the Histogram, the 0.00 Base Line, the Positive Zone and the Negative Zone. As default, the MACD Line is calculated by subtracting the value of a 26-Period EMA from the value of a 12-Period EMA on your chart to give you your MACD Line value. The MACD indicator will give a MACD Line value in whatever timeframe you are in. The Signal Line is a 9-Period EMA of the MACD Line and is used with the MACD Line to generate/trigger Buy and Sell Signals. If the MACD Line crosses ABOVE the Signal Line, that is considered a Buy Signal. If the MACD Line crosses BELOW the Signal Line, that is considered a Sell Signal. Note that Buy and Sell Signals can be generated in both the Positive and Negative Zones The Histogram is a graphical representation of the distance between the MACD Line and the Signal Line (9-Period EMA). Green Histograms will appear above the 0.00 Base Line when the MACD Line crosses ABOVE the Signal Line. The Green Histograms will Increase in size the further the MACD Line moves upwards & away from its Signal Line. The Green Histogram will also lighten in colour if the MACD Line fails to move higher to create a higher Green Histogram Bar. Red Histograms will appear below the 0.00 Base Line when the MACD Line crosses below the Signal Line. The Red Histograms will increase in size the further the MACD Line moves downwards & away from its Signal Line. The Red Histogram will also lighten in colour if the MACD Line fails to move lower to create a lower Red Histogram Bar. The Positive Zone is the area ABOVE the 0.00 Base Line. If the MACD Line crosses above the 0.00 Base Line, this means that a 12-Period EMA is ABOVE a 26-Period EMA on your price chart in whatever timeframe you are in. So to reiterate, the MACD Line will be ABOVE the 0.00 Base Line when a 12-Period EMA is ABOVE a 26-Period EMA on your price chart. The Negative Zone is the area BELOW the 0.00 Base Line. If the MACD Line crosses below the 0.00 Base Line, this means that a 12-Period EMA is BELOW a 26-Period EMA on your price chart in whatever timeframe you are in. So to reiterate, the MACD Line will be BELOW the 0.00 Base Line when a 12-Period EMA is BELOW a 26-Period EMA on your price chart. Note that the MACD indicator has no upper limit in the Positive Zone and no lower limit in the Negative Zone. The MACD indicator can also be used to show Divergence between the Price and the MACD Line. In a Bullish scenario, if the Price is making Lower Lows and the MACD Line is making Higher Lows then this is potentially Bullish. For a Bearish scenario, if the Price is making Higher Highs and the MACD Line is making Lower Highs then this is potentially Bearish. The MACD indicator can also be used to show Hidden Divergence between the Price and the Histogram. In a Bullish scenario, if the Price is making Higher Lows but the Histogram is making Lower Lows then this is potentially Bullish. For a Bearish scenario, if the Price is making Lower Highs but the Histogram is making Higher Highs then this is potentially Bearish. The MACD can sometimes produce false positive as can be seen here where we have Bullish Divergence with the Price Converging with the MACD Line but no real breakout happened. Note that the MACD Line and Signal Line will be in line with the current Candle Wick in whatever timeframe you are in. The MACD indicator is a lagging indicator but it also has the power to be predictive especially with potential upcoming Buy and Sell signals, divergence and when used with other indicators like Volume, the Ichimoku Cloud, Bollinger Bands, MAs or EMAs, RSI, ADX DI to name but a few as these can help complement the MACD signals to help get a much clearer picture as to what is going on and what may happen on your chart in whatever timeframe you are in, because there is a lot of BS, FUD, FOMO and utter crap out there so a little clarity is always helpful ;-) For me the MACD is a very useful indicator with my trading, so I hope you have found this quick and dirty MACD educational post helpful. Happy trading. Notes: MACD Line = 26-Period EMA Value - 12-Period EMA Value = MACD Line Value Signal Line = 9-Period EMA of the MACD Line. Used with the MACD Line to trigger Buy and Sell Signals Histogram = Distance between the MACD Line and the Signal Line 0.00 Base Line = Crossover point to the Positive Zone and/or Negative Zone Positive Zone = a 12-Period EMA is ABOVE a 26-Period EMA on your price chart Negative Zone = a 12-Period EMA is BELOW a 26-Period EMA on your price chart EMA = Exponential Moving Average.
BITSTAMP:BTCUSDEducation
by TradingThroughTheLens
2
RSI Indicator & How To Use ItHello everyone, today, we´re gonna talk about an RSI and how to use it. What is an RSI? Basically, it´s an indicator that shows if the asset is overpriced or underpriced. Basic information RSI is 0-100 if the price is at 0-30, the asset is underpriced and theoretically it should go up. if the price is at 70-100, the asset is overpriced and theoretically it should go down. Professional information You can set an MA based or RSI moves. And this is getting really interesting right now :) Every time, the MA is touching bottoms or tops of RSI, it will go up or down (touch bottom = go up, touch top = go down.) It works like an ball and floor. You just drop the ball on the floor and everytime the ball touches the floor, ball will just bounce and go up. I drew it to the chart (green circles). Okay guys, seems like we are in the end. Hope this helped you to make greater decisions and take good view at RSI. Personally, I use RSI a lot and it´s really saving my a$$. Thank you so much for reading my post, I´ll be really glad if you will hit that like button and follow me, so you can see other tutorials. Have a nice rest of your day and stay safe. Tommy.
CAPITALCOM:OIL_CRUDEEducation
by TommyTK247
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CBOT:UB1!Education
by d-MR96nBa
42
Trading StrategyDoesn't matter which coin I used, KAVA was picked at random for back testing. The 7, 30, and 100 are used for trend analysis. When both the RSI and MFI are in confluence with support, that is the entry trigger. When above the 7, 30, 100 ride the trend and only exit when bear div on 4hr is apparent, MFI RSI in confluence at overbought, price drops below the 30. Once below the 100, the 100 becomes resistance and the exit trigger. I had one loss when back testing this method. Since these are lagging indicators (especially on the daily) use the 4hr for entry while looking for candle reversal signals at support. 8 trades here = less stress, bigger rewards, less risk. SL should be placed below support at -5%. No leverage, just spot, slow and steady wins the race.
KRAKEN:KAVAUSDEducation
by Happy_Candles
How To Trade Yen Pair With Ascending Triangle (CADJPY)Price closed above 90.334. Now, wait for a price action signal at 90.334. First price action signal is engulfing candlestick. Enter at 90.505. Second price action signal is engulfing candlestick. Enter at 90.538. Set Take Profit at 91.185. Set Stop Loss at 90.312. The Reward:Risk Ratio is 2.86. Note: The EMA 10, EMA 20, and Trend Line have a positive slope. The higher low touches the Horizontal Support, EMA 10 Support, EMA 20 Support, and Trend Line Support.
Education
by TradeLive-
Moving Average Convergence Divergence Indicator Visual EducationHello Traders, Today I wanted to go over one of my favorite as well as one of the most widely used tools in trading, the Moving Average Convergence Divergence (MACD) indicator. This moving average indicator was created invented in 1979 by Gerald Appel responsible for the MACD line and Signal line and later added to this was the histogram, developed by Thomas Aspray in 1986. Now that you know who created the MACD indicator lets discuss the components of the indicator. The MACD indicator consists of 4 main components, the Signal line , the MACD line , the histogram and the zero line of the histogram often referred to as the baseline. Below are the calculations of the different components to help you better understand what makes up this indicator. MACD Indicator Components and Calculations (White Labelling) Signal Line Red colored smooth line The signal line is simply an exponential (weighted) moving average (EMA) based on the prior 26 days closing price. As with any EMA the formula looks like this: EMA = Closing price x 26 + EMA (previous day) x (1-26) MACD Line Blue colored rigid line The MACD line, similarly to the Signal Line is also an EMA based on the prior 12 day closing price. Also, similarly to the signal line it uses a similar equation to display the line which is: EMA = Closing price x 12 + EMA (previous day) x (1-12) Histogram Green and Red vertical bars charted around a horizontal axis known as the baseline. The histogram is determined by subtracting the signal line from the MACD line. This is easier to interpret than looking at the two lines alone, since it is sometimes difficult to tell if one curve is steeper than the other. The histogram is positive when MACD is higher than its nine-day EMA, and negative when it is lower. This oscillator is definitely a nice touch to the indicator as a whole and my personal favorite indication for divergence which I will teach you more about in part 2 of this series. Histogram Zero line Aka "Baseline" This is the line in the center of the histogram oscillator that is also referred to as the baseline. This line is important as you will see later when I explain the signals this indicator creates. This line is calculated by the MACD Line and the Signal line crossing. Which is another way for you to see that the lines are crossing both bullish and bearish crosses. The calculations behind each part of the indicator is not really information that you need to remember as @TradingView has put a nice suite of house tools for you to use that calculate this for you but, I find that the more you know the better you are able to understand these charts and who knows, maybe someday this will help you crate your own indicator using the pine script editor they also make available to us for free. Also, if you understand the math it helps you when editing the settings to adjust indicators better per the asset you are trading. MACD Indicator Signals (Yellow and Teal Labelling) Now lets go over the signals that this indicator produces help with the way you can utilize this indicator to help you trade. A key note to remember is that the MACD indicator is a Moving average indicator and is best used in a trending market. You can identify a trending market by looking for price action that is heading in one solid direction up or down. Tending markets are usually noted by “higher highs” and “higher lows” in an uptrend and “lower highs” and “lower lows” in a downtrend . This indicator is best used to help you determine trend reversals. There are also 3 major signal components to this indicator but, in this first series we are only going to discuss 2 as it is important to understand this indicator before moving onto the next step and applying the more advanced features. These 3 major components are MACD line crossing over the Signal line and both signal line and MACD lines crossing over the zero line on the histogram . MACD Cross (Yellow) The top MACD line (red rigid line) crossing down over the Signal line (Blue smooth line) is a bearish signal and generally indicates a sell signal letting you know that the price action has potentially came to the end of an uptrend. Again, this is used mainly in trending markets and can be very helpful to assisting in taking profit in a long position or starting a new short position. In contrast to the bearish MACD cross , you can also see on the bottom of the chart that there is an indication of a bullish cross of the MACD line (Red rigid line) over the Signal line (Blue smooth line). This would be a good indication the the downtrend has ended and it may be a good time to start a long position or close a short position. The Histogram Zero line cross (Teal) There are 2 signals you can get from this but the one that matters in my opinion the most is the signal line. So for the sake of explanation I have shown them both together as both bearish and bullish signals on the chart. Now that you know about the signal line and the MACD line it should be easy to identify when these two lines are crossing the zero line of the histogram that we have also discussed. As shown in the chart you can see that the bullish cross is showing the two lines coming from below the Zero Line and crossing above which would be a bullish signal and you would be looking for a buy, potential start of or continuation of an uptrend. On the contrary, if these lines crossed from above the Zero line below then this would be a bearish sell signal and you would be looking to open a short position, be looking for a reversal of an uptrend or continuation of a downtrend. Now here are some key takeaways and tips you will want to always follow when using this or any other indicator. #1: Make sure you know the type of market you are trading by analyzing the market structure. Is it trending and creating higher highs and higher lows, lower highs and lower lows? Or is it ranging in almost a rectangular box? #2: KNOW YOUR INDICATOR and the best market it is used in, again, the MACD Indicator is best used in a trending market! #3: This is probably the most important of the 3, It is a must that you learn everything about each indicator you are using and to never use ONE indicator/Oscillator for signals stand alone by itself. Trading just like anything else in life is a numbers game and the better statistics you have, the better outcome you will receive. Congratulations Traders! You now know the basics of the MACD Indicator!!! I hope you will come back for part two and three of this series that I will be releasing after the new year to help some of the new traders entering this ever expanding community here on TradingVeiw! Part 2: MACD and RSI Divergences Visual Education Release 01/01/2022 Part 3: Falling wedges and Fibs Release 01/02/2022 I hope you had a green year and look forward to learning and trading with all of you winners next year! Happy New Years, Savvy
Education
by Savvythe1
The power of the VWAP!As day traders we use the VWAP lots in our trading and have even created custom versions of it which help us manage our trades. In this video I go over exactly what happened to US30 / Down Jones at the Frankfurt open and the New York open, and by using the VWAP today we could have taken advantage of these moves, both up and down! Do you use the VWAP? Let us know in the comments below! Also attached to this video are other educaitonal videos you might find value in!
OANDA:US30USDEducation
by PrimedGroup
Moving Average ChannelA lot of traders like myself, like to visualize the moving averages on their chart and incorporate them in their trading strategies. But what is extremely common in doing this, is traders being under the assumption that a moving average is the exact price in which we see supply and demand in the market. In this video, I clearly outline how to add a channel around your moving averages, to give you an idea of where we may see a change in supply and demand. Having clarity in an area can help traders understand the moving average better than just a thin line. If you do use moving averages in your trading strategies, I recommend trying this little trick to improve your success rate and understand breakouts better. - Jordon
Education
by the5erstrading
Weekly Line Chart DivergencesHello traders, I am not a financial advisor. I am not telling you to trade any asset. I am simply sharing my ideas on how to use tools to implement my own investment strategy. Here is a zoomed-out look you can use to come up with some of your own ideas on where the $SPX may go and how to manage your risk. Most of my core strategies are developed on the indices so I will have to implement them on individual tickers unless the comments are interesting. This is a lagging indicator and should put me on the side of the trade that is *probably* likely to continue. By probably, I mean you need to do your own research and look at what the markets want to go and develop your own tools to work with the data. Orientation: Line Chart of ticker on weekly time frame RSI using 12 periods (or weeks, in this case) Signals can be marked using a vertical line or time-based axis marker . In this case, I am using 3 colors of lines, explained by the "Monday Action" legend. We will dive into more detail later on. I also have EMA using ohlc4 on periods (or weeks) 10, 25, 50, 100, 200. Now to the good stuff: Divergences have been around for quite some time. Research about the RSI (Relative Strength Index) and it's roots It is much easier to see something that is larger, than smaller, thus we look at weekly time frames One can use volume, closing price and RSI to help manage one's risk Narrowing a decision to 3 choices can help alleviate indecision So for this application of the RSI and divergence, one can use a simple line chart on a weekly time frame (this chart is based on the closing price from what I can tell, but I was unable to confirm that with the Help Center. I was able to confirm by checking yesterday's close with current reading - it will be different after this post as the weekly close will come in today (writing before market close Friday morning)). We can start at the March 2020 rally. We can see the March 23rd, 2020 weekly close paint a divergence on the RSI. One can see the price close at a higher high when compared to March, 16th, 2020. The RSI values remain relatively flat: 17.95 to 18.04. Find entry One might conclude this is a time to buy. Because of the magnitude of the move DOWN, the move up was also shorted. One would have to employ the use of other tools in order to find entry in the following week. (Use the white anchored notes to see the explanations of thought process). Find an entry in the next week. One can place orders on the weekend in "shotgun fashion" perhaps placing 50% order above current price and 50% below, or whatever method suits you. Hedge Risk The next yellow line is 08/24 - 31/2020. The close indicates indecision in the market. Since this is the first divergence I would simply hedge the FANTASTIC long during the March 2020 buy. This can help to be determined from YELLOW vs RED using the 10 period moving-average of volume. Use options or other means to protect one's long investments Sell of Heavy Hedge The next divergence is JAN 2021. This is the second one so I would probably sell at this point. I would use my other tools to figure out what to do. Heavy hedging can be using derivatives or shorting your long positions. Timing A simple way to use this strategy might be to use the color's GREEN, YELLOW, RED, just like traffic lights. There will be deviations, and variations to the method, but if you back-test this you will probably find this works generally well. Monday Action Now I used the words Monday Action simply because that was the next possible day to make a decision. I can make my decision probably anytime within Friday if I feel comfortable with it. I can also place actions for Monday on the weekend. Bottom Line This week's close is very important. If we follow the green, yellow, red method from above, this very well can be a RED. It can also be another YELLOW. Volume is indicating something big, but we will see!
SP:SPXEducation
by elkenpolar
My Love For 200 Moving averageOne of my most used indicators is the moving average. I personally believe that hypothetically, moving average "alone" is sufficient enough to build a profitable trading strategy. I hope to implement this thought in the coming years. In the chart, we can see the 200 WMA for the 1H, 2H, and 1D moving average. I'm particularly fascinated by how price is respecting the WMA as support and resistance. I think this is worth taking a deep dive into. What do you think?
COINBASE:LTCUSDEducation
by Aghughu
Trade Using Exponential Moving Average and Trend LineHigher Lows Are Represented By Diagonal Trend Line Lower Highs Are Represented By Diagonal Trend Line After Price Closes Above Diagonal Resistance Line (Lower Highs), Enter A Long Position. Enter using the closing price of breakout candle. Enter a second long position when price forms a rejection candlestick wick in the EMA 10 EMA 20 Area. Enter using the closing price of rejection candlestick. H2, H3, H4 Chart. EMA 10 is above EMA 20 in these chart timeframes. EMA 10 Above EMA 20 on multiple timeframes is a good indicator that the market is bullish.
ZEducation
by TradeLive-
1
My Strategy Works On All Markets and All Time FramesPrice closed above EMA 20, EMA 10, Horizontal Support Resistance, and Trend Line. A pin bar formed on the retest and the pin bar candlestick wick protruded through the support levels. The support levels are EMA 20, EMA 10, Horizontal Support Resistance, and Trend Line. In this example, there are three higher lows moving into a diagonal resistance level and a horizontal resistance level. Price broke through those two levels and retested those levels with a pin bar. After the break and close above the horizontal and diagonal level; those levels became support. Entry is the closing price of the pin bar. Target price is the previous swing high.
DEducation
by TradeLive-
1
CoRA Ribbons - Two ideas how to use themSince CoRA Waves and Ribbons could help you to identify the trend better and more reliably, this indicator provides a good baseline for your strategy. The indicator " CoRA Ribbon - Multiple Compound Ratio Weighted Moving Averages " (#revision: lv21) was used in the following screenshots. Information and details on CoRA waves can be found in the description of the indicator. Let yourself be inspired. Let's start. These are just two of the many possibilities. I look forward to any further suggestion or idea. Comments and additional screenshots are always welcome. Even if CoRA Waves lag less than other moving averages, note, as with all other strategies, that one indicator alone is usually not sufficient. Usually further analyzes and the like are required. Therefore, understand the two examples for what they are: A hint that it is worth taking a look and perhaps one or the other known moving average can be exchanged very well with a CoRA Wave or a CoRA Ribbon - in order to get faster entry points.
Education
by consilus
2
How To Set Stop Losses And Take Profits using EMA StrategyWait for price to break and close below a level. In this example, price closed below support level and turned resistance. Next, wait for price to retest level as new resistance. The retest in this example formed a candlestick that created a wick which protruded through Horizontal Resistance Level, EMA 20 Resistance Level, and Diagonal Trend Resistance Level. For short trade opportunity, set stop loss above EMA 20 Price Level and Rejection Candlestick High Price. Set take profit at previous swing low.
Education
by TradeLive-