EMA Cross (Golden Cross & Death Cross)
Example:
• Golden Cross (bullish signal): When the short EMA (e.g., 50) crosses above the long EMA (e.g., 200), it signals a potential upward trend.
• Death Cross (bearish signal): The opposite situation – when EMA-50 crosses below EMA-200, indicating a potential price drop.
➡ Application:
Used on daily charts for long-term trend analysis.
2. Price above / below EMA (Trend signal)
Example:
• When the price moves above EMA-50 or EMA-200, it indicates an upward trend.
• If the price is below the EMA, it is a bearish signal indicating a downward trend.
➡ Application:
Traders use EMA as dynamic support and resistance. For example, if the price bounces off EMA-50 several times, it is a strong support level.
3. Price deviation from EMA (Signal of correction)
Example:
• If the price moves too far from the EMA, especially from long EMAs (e.g., EMA-200), a pullback or correction can be expected.
➡ Application:
Used to find entry points. For example, if the price deviates significantly from EMA-50, one can wait for a pullback and look for an entry point in the trend.
4. EMA as a filter for trades
Example:
• If the price is above EMA-200, only longs are opened.
• If below EMA-200, shorts are considered.
➡ Application:
This helps avoid trading against the trend. For example, if you are trading at support and resistance levels, but the price is below EMA-200, it is better to look for sells.
5. Fast and slow EMA (Combination for trend)
Example:
• EMA-9 and EMA-21 (or EMA-20 and EMA-50) can be used together:
• When EMA-9 crosses above EMA-21 – a buy signal.
• When EMA-9 crosses below EMA-21 – a sell signal.
➡ Application:
Works well on lower timeframes (M5, M15, H1) for finding short-term movements.
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