! How to determine market condition using EMA—explained with a real example.
Assume, you have set 3 EMAs on your chart:
EMA(7) = Yellow Line (Short-Term)
EMA(25) = Pink Line (Mid-Term)
EMA(99) = Purple Line (Long-Term)
1. Strong Uptrend (Buy Signal)
Condition:
Price above all EMAs
EMA(7) > EMA(25) > EMA(99)
Example:
→ Assume,
EMA(7) = 0.00002073
EMA(25) = 0.00001997
EMA(99) = 0.00001918
Current Price = 0.00002106
Here, the price is above all EMAs, and the EMAs are stacked on top of each other.
Understand: Buyers are strong now, market is in uptrend.
Action: Traders often take long positions in this condition (Buy).
2. Trend Weak/Reverse (Sell Signal)
Condition:
EMA(7) has gone below EMA(25)
Price below EMA(7) and EMA(25)
Example:
→
EMA(7) = 0.00001950
EMA(25) = 0.00001980
Current Price = 0.00001940
Here, EMA(7) has dropped below EMA(25).
Understand: Buyers' strength is decreasing, sellers are active, downtrend may begin.
Action: Take a short position or wait (Sell or Wait).
3. Sideway Market/Neutral Condition
Condition:
EMA(7), EMA(25), EMA(99) are nearly close (the lines are parallel)
Example:
EMA(7) = 0.00002010
EMA(25) = 0.00002008
EMA(99) = 0.00002005
Current Price = 0.00002009
Understand: Market is neutral, waiting for a big movement.
Tips:
Do not follow EMA signals alone, also check RSI/Volume/Price Action.
EMA Crossover (e.g., 7 EMA crosses above/below 25 EMA) — this is a strong signal.
Small EMA shows more speed, so it can be a fake-out. Large EMAs (25, 50, 100, 200) are more reliable, but provide signals slowly.
Summary:
Price above all EMAs: Uptrend
Small EMA crosses above large EMA: Buy
Small EMA crosses below large EMA: Sell
All EMAs are parallel: waiting for movement
