#monaem Trade Chapter -8
In the image, you see EMA(7), EMA(25), and EMA(99) (marked lines — yellow, pink, and purple). The current trend and strength of the market can be easily understood with EMA. Below is a simple explanation of how to understand the market condition by observing EMA:
Strategy to understand market condition by observing EMA
1. Position of EMA:
If the price is above all EMA lines:
Market is in a strong uptrend (buyers are in control).
(For example: the current candle is above EMA(7), EMA(25), EMA(99))
If the price goes below EMA(7) and EMA(25):
Short-term trend is weak, sell pressure may increase.
2. EMA crossover:
If EMA(7) goes above EMA(25):
Buy signal, because a rapid movement has started.
If EMA(25) rises above EMA(99):
The trend is also strongly bullish (upward) in the mid-term.
All EMA lines are pointing upwards:
Strong uptrend.
3. Distance of EMA:
The farther EMA(7) and EMA(25) are:
Price speed is high, meaning it is currently volatile with many buyers involved.
What is seen in your picture:
Price is going above all EMA lines and EMA(7) > EMA(25) > EMA(99).
Price is well above EMA(7), so it is a very strong uptrend (maybe there has been excessive buying in the short term).
A slight sell pressure is observed on the last candle (red candle), but the trend is still up.
Warnings and advice:
If the price moves far from EMA(7), then there may be a slight correction (price drop) in the short term.
It's better to make big decisions when the price is around EMA(25) or EMA(99).
In summary:
If the price is above all EMA lines — uptrend.
If EMA(7) is above EMA(25) and EMA(99) — strong uptrend.
If the price falls below EMA(7) — sell pressure may increase in the short term.
