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The use of average lines (MA, EMA)
Average lines are one of the most popular among traders indicators. They are divided into different options, in particular, often use MA and EMA. Line exponential moving average (EMA) applied to identify the trend and to find entry points to work with. The intersection of these curves means in some systems, a good moment for purchase or sale. The same intersection is also used to close a position. But what may be different between the middle line to have intersections, but not to match exactly?
The main variable for the EMA is the value of the period that affects the "sensitivity" points of the average curve. The formulae to calculate the values for the EMA take into account the change in time. Low sensitivity indicator dots will be very close to the market price. In this case, the average curve in Forex is to follow all the figures, educated market quotations. The line may pass directly through the graph, formed from, for example, candles.
Trading strategy for medium-sized lines:
• Effective strategy EMA
• Minute strategy
If the value of period EMA on the contrary to increase, we will get a more smooth curve, not moving right on schedule from the candle. The following values of the indicator will be more averaged, and hence, a certain way to move away from various of the figures, extremes and so forth, educated quotes. High sensitivity levels are used most often in cases where a trader needs to indicator the trend and average line for the price of a long period of time.
The period of EMA indicator
Period represents the time for which the average value is calculated. Naturally, the more control points included in the calculation, the smoother will be our curve. Thus, by setting on the chart two lines with different periods, we will observe the different movement of these curves in the graph. A smaller period will make the curve more susceptible to market spikes. Every sharp rise in prices will be accompanied by no less rapid response of EMA.
The second line, which will be exposed to a longer period, on the contrary the short-term UPS or falling prices did not deign to his scrutiny. In this case, the value of EMA if these changes in prices will not change from their last digits. Recall that the calculation of a new point indicator EMA takes into account previous values of the average line (a provisional price and time), and therefore, the longer a trader uses, the less the effect on the calculation gives one point.
The middle line can be used to educate people about the state of the market, and can be used to determine points of entry or exit in the work. Traders who choose to trade with the trend, can use EMA to determine the direction of price movement. The slope of the curve relative to the horizontal will determine the state of the market at the moment. EMAS are standard indicators of the terminal Meta Trader4. To use this tool can every speculator, who is versed in the standard range of the terminal.
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| Category: Forex | Added by: (06.11.2017)
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| Views: 419
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