If you are trading for a while you must have witnessed the presence of a moving average indicator in almost all the trend indicators.
Therefore, understanding the concept of moving average becomes upmost important.
There are basically three types of moving averages:-
- SMA ( Simple Moving Average )
- EMA ( Exponential moving average )
- WMA ( Weighted Moving Average )
What is EMA?
EMA or Exponential Moving Average is a technical indicator that weighs more weightage on the most recent price data. Unlike SMA or Simple Moving Average which just calculates the average price of the security.
The most common time periods used by traders while working with EMA (Exponential Moving Average) are 50, 100, and 200 days. This period is more suitable for traders who love to place long-term traders. For, the traders who love to place short-term trade normally use a 12 to 26 days time frame.
The Exponential Moving Average is considered a much more powerful indicator than Simple Moving Average as it is believed to reduce the market wise as it excludes the price data which no longer have an impact.
How to configure EMA on Binomo?
Setting the Exponential Moving Average on Binomo is quite easy first you need to open your Binomo trading account if in case you don’t have an account click on the given link………………………..you will land on the Binomo trading dashboard.
Well once you have entered the trading dashboard click on the trading tool option.
Then click on the Moving average option which is at the top of the list.
Now you can set the moving average field into close, open, high, or low as well as you can also set the type into Simple, Exponential, Smoothed, or Weighted as per your requirement. As of now in this article, I am discussing EMA so choose EMA. finally hit on the apply button and your EMA will be applied.
Buy with bullish domination
When the green line or ( Exponential Moving Average 10 ) intersects the Exponential Moving Average 21 from the button and later stays above the EMA 21 is a signal of the bullish trend and we can place a buy trade here.
Buy with bearish domination
When the green line or ( EMA 10 ) intersects the EMA 21 from above and later stays below the EMA 21 is a signal of the bearish trend and we can place a sell trade here.
“Good luck” for your upcoming trade. I hope I am able to make you all understood what is Exponential Moving Average in the most easiest way. I have covered all the topics which comes under the Exponential Moving Average on Binomo.