Catch my subscribers ❤️ You are the best! The secret of major players that they keep silent about. The magic of numbers 50 and 200.. Your first step in technical analysis: understanding the trend.
Now let's take a closer look at how it works and which periods to choose.
How do periods work in moving averages (EMA/MA)?
The value of the period (9, 20, 50, 99, 200, etc.) is the number of candles (bars) that the indicator takes to calculate its average price.
· On the M1 (minute) chart — a period of 20 will mean averaging over 20 minutes.
· On the H1 (hour) chart — a period of 20 will mean averaging over 20 hours.
· On the D1 (daily) chart — a period of 20 will mean averaging over 20 days.
· On the MN (monthly) chart — a period of 20 will mean averaging over 20 months.
Conclusion: The meaning of the period is always tied to the timeframe of the chart.
What periods should be set for EMA/MA for the "Golden Cross"?
The "Golden Cross" is a classic figure that forms when the fast moving average crosses the slow one. The most popular and widely recognized combination for a long-term trend:
Fast EMA: Period 50 (for example, 50 days on the daily chart)
· Slow EMA: Period 200 (200 days on the daily chart)
To be continued.....