EMA technical indicator analysis
I attempt to use the simplest way to express my understanding of the EMA technical indicator.
Trend tracking- Basically, completely use EMA to track the main trend and take action. As long as the stock's closing price is below the average level, traders can continue to hold positions.
Dynamic resistance and support levels- The 50-day or 200-day EMA periods can serve as support and resistance ranges, allowing traders to determine their respective trading strategies and decisions.
Moving average line crossover.By using two different moving average lines, buy and sell signals are obtained. If the market is in a stable and strong uptrend, the indicator line will also show an uptrend; conversely, this holds true in a downtrend as well. EMA crossover indicates a change in momentum and trend. When the shorter-term EMA crosses above the longer-term EMA, it indicates a call signal; otherwise, it is a put signal. In many cases, asset prices will tend to approach the EMA line that is further away after the crossover is completed. Typically, the area between the two EMA lines is a good time to enter the market with the trend.
The 12-day and 26-day EMA are the most popular short-term moving average analysis tools, while the 50-day and 200-day EMA are used for analyzing long-term trends.
Below, I will set up the 12-day, 26-day, 50-day, and 200-day EMA for analysis. $Berkshire Hathaway-B (BRK.B.US)$
Put signal.
1.When the short-term moving averageFell belowThe long-term moving average is a put signal.。(Red arrow)
2.Stock prices rebound after falling to the 200-day EMA support point.，However,The short-term moving average is still below the long-term moving average.，This is a false breakout.，Not a true call signal.。（Red circle）
bullish signal
1.When the short-term moving averageHigher thanThe long-term moving average is a call signal。(Green arrow)
2.Stock price rebounds to the 200-day EMA support point after falling，MoreoverShort-term moving average is above the long-term moving averageIt is a call signal。(Green arrow)
3.The stock price fell to the 200-day EMA support point, butShort-term moving average fell below the 50-day EMA but did not fall below the 200-day EMA., it is a short-term downward signal but still a long-term call signal。(green circle)
4.Surprisingly, the moving average trend after the green circle is very good,Short-term moving average is above the long-term moving average，It has always been a call signal for the stock price.Always rising.。![]()
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Trend tracking- Basically, completely use EMA to track the main trend and take action. As long as the stock's closing price is below the average level, traders can continue to hold positions.
Dynamic resistance and support levels- The 50-day or 200-day EMA periods can serve as support and resistance ranges, allowing traders to determine their respective trading strategies and decisions.
Moving average line crossover.By using two different moving average lines, buy and sell signals are obtained. If the market is in a stable and strong uptrend, the indicator line will also show an uptrend; conversely, this holds true in a downtrend as well. EMA crossover indicates a change in momentum and trend. When the shorter-term EMA crosses above the longer-term EMA, it indicates a call signal; otherwise, it is a put signal. In many cases, asset prices will tend to approach the EMA line that is further away after the crossover is completed. Typically, the area between the two EMA lines is a good time to enter the market with the trend.
The 12-day and 26-day EMA are the most popular short-term moving average analysis tools, while the 50-day and 200-day EMA are used for analyzing long-term trends.
Below, I will set up the 12-day, 26-day, 50-day, and 200-day EMA for analysis. $Berkshire Hathaway-B (BRK.B.US)$
Put signal.
1.When the short-term moving averageFell belowThe long-term moving average is a put signal.。(Red arrow)
2.Stock prices rebound after falling to the 200-day EMA support point.，However,The short-term moving average is still below the long-term moving average.，This is a false breakout.，Not a true call signal.。（Red circle）
bullish signal
1.When the short-term moving averageHigher thanThe long-term moving average is a call signal。(Green arrow)
2.Stock price rebounds to the 200-day EMA support point after falling，MoreoverShort-term moving average is above the long-term moving averageIt is a call signal。(Green arrow)
3.The stock price fell to the 200-day EMA support point, butShort-term moving average fell below the 50-day EMA but did not fall below the 200-day EMA., it is a short-term downward signal but still a long-term call signal。(green circle)
4.Surprisingly, the moving average trend after the green circle is very good,Short-term moving average is above the long-term moving average，It has always been a call signal for the stock price.Always rising.。
Advantages - In a turbulent market, for traders who like to trade in high volatility markets or follow daily trends, EMA is more suitable for use. EMA reacts more strongly to price changes, therefore it has a greater advantage over simple MA.
Disadvantages - EMA has higher sensitivity, which can sometimes make it more susceptible to false signals.
The above is just for personal opinions, welcome everyone to discuss together.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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steady Pom pipi OP :