Ема 8 18 Форекс

DOW rebounds rather strongly in early session, up more than pts. It&#;s not unexpected as DOW hit % projection of to from at yesterday. It&#;s also trying to draw support from 55 week EMA (now at ).

We&#;ll have to see whether such rebound can gather sustainable momentum. But for now, with the index staying well below 55H EMA (now at ), more decline is expected. Break of will target % projection at next.

A break of 55H EMA will indicate short term bottoming and bring stronger rebound, possibly through resistance. But that doesn&#;t change the outlook in the bigger context.

That is, fall from is seen as correcting whole up trend from Further decline is expected to % retracement at before completion. It&#;s just a matter of going straight to this fibonacci level, or have an interim rebound first.

What Is an Exponential Moving Average (EMA)?

An exponential moving average (EMA) is a type of moving average (MA) that places a greater weight and significance on the most recent data points. The exponential moving average is also referred to as the exponentially weighted moving average. An exponentially weighted moving average reacts more significantly to recent price changes than a simple moving average simple moving average (SMA), which applies an equal weight to all observations in the period.

Formula for Exponential Moving Average (EMA)

​EMAToday​=​(ValueToday​∗(1+DaysSmoothing​))​where:​

While there are many possible choices for the smoothing factor, the most common choice is:

That gives the most recent observation more weight. If the smoothing factor is increased, more recent observations have more influence on the EMA.

Calculating the EMA

Calculating the EMA requires one more observation than the SMA. Suppose that you want to use 20 days as the number of observations for the EMA. Then, you must wait until the 20th day to obtain the SMA. On the 21st day, you can then use the SMA from the previous day as the first EMA for yesterday.

The calculation for the SMA is straightforward. It is simply the sum of the stock's closing prices during a time period, divided by the number of observations for that period. For example, a day SMA is just the sum of the closing prices for the past 20 trading days, divided by

Next, you must calculate the multiplier for smoothing (weighting) the EMA, which typically follows the formula: [2 ÷ (number of observations + 1)]. For a day moving average, the multiplier would be [2/(20+1)]=

Finally, the following formula is used to calculate the current EMA:

• EMA = Closing price x multiplier + EMA (previous day) x (1-multiplier)

The EMA gives a higher weight to recent prices, while the SMA assigns equal weight to all values. The weighting given to the most recent price is greater for a shorter-period EMA than for a longer-period EMA. For example, an % multiplier is applied to the most recent price data for a period EMA, while the weight is only % for a period EMA.

There are also slight variations of the EMA arrived at by using the open, high, low, or median price instead of using the closing price.

What Does the EMA Tell You?

The and day exponential moving averages (EMAs) are often the most quoted and analyzed short-term averages. The and day are used to create indicators like the moving average convergence divergence (MACD) and the percentage price oscillator (PPO). In general, the and day EMAs are used as indicators for long-term trends. When a stock price crosses its day moving average, it is a technical signal that a reversal has occurred.

Traders who employ technical analysis find moving averages very useful and insightful when applied correctly. However, they also realize that these signals can create havoc when used improperly or misinterpreted. All the moving averages commonly used in technical analysis are lagging indicators.

Consequently, the conclusions drawn from applying a moving average to a particular market chart should be to confirm a market move or indicate its strength. The optimal time to enter the market often passes before a moving average shows that the trend has changed.

An EMA does serve to alleviate the negative impact of lags to some extent. Because the EMA calculation places more weight on the latest data, it “hugs” the price action a bit more tightly and reacts more quickly. This is desirable when an EMA is used to derive a trading entry signal.

Like all moving average indicators, EMAs are much better suited for trending markets. When the market is in a strong and sustained uptrend, the EMA indicator line will also show an uptrend and vice-versa for a downtrend. A vigilant trader will pay attention to both the direction of the EMA line and the relation of the rate of change from one bar to the next. For example, suppose the price action of a strong uptrend begins to flatten and reverse. From an opportunity cost point of view, it might be time to switch to a more bullish investment.

Examples of How to Use the EMA

EMAs are commonly used in conjunction with other indicators to confirm significant market moves and to gauge their validity. For traders who trade intraday and fast-moving markets, the EMA is more applicable. Quite often, traders use EMAs to determine a trading bias. If an EMA on a daily chart shows a strong upward trend, an intraday trader’s strategy may be to trade only on the long side.

The Difference Between EMA and SMA

The major difference between an EMA and an SMA is the sensitivity each one shows to changes in the data used in its calculation.

More specifically, the EMA gives higher weights to recent prices, while the SMA assigns equal weights to all values. The two averages are similar because they are interpreted in the same manner and are both commonly used by technical traders to smooth out price fluctuations.

Since EMAs place a higher weighting on recent data than on older data, they are more responsive to the latest price changes than SMAs. That makes the results from EMAs more timely and explains why they are preferred by many traders.

Limitations of the EMA

It is unclear whether or not more emphasis should be placed on the most recent days in the time period. Many traders believe that new data better reflects the current trend of the security. At the same time, others feel that overweighting recent dates creates a bias that leads to more false alarms.

Similarly, the EMA relies wholly on historical data. Many economists believe that markets are efficient, which means that current market prices already reflect all available information. If markets are indeed efficient, using historical data should tell us nothing about the future direction of asset prices.

A forex trader can create a simple trading strategy to take advantage of trading opportunities using just a few moving averages (MAs) or associated indicators. MAs are used primarily as trend indicators and also identify support and resistance levels. The two most common MAs are the simple moving average (SMA), which is the average price over a given number of time periods, and the exponential moving average (EMA), which gives more weight to recent prices. Both of these build the basic structure of the Forex trading strategies below.

Moving Average Trading Strategy

This moving average trading strategy uses the EMA, because this type of average is designed to respond quickly to price changes. Here are the strategy steps.

• Plot three exponential moving averages—a five-period EMA, a period EMA, and period EMA—on a minute chart.
• Buy when the five-period EMA crosses from below to above the period EMA, and the price, five, and period EMAs are above the 50 EMA.
• For a sell trade, sell when the five-period EMA crosses from above to below the period EMA, and both EMAs and the price are below the period EMA.
• Place the initial stop-loss order below the period EMA (for a buy trade), or alternatively about 10 pips from the entry price.
• An optional step is to move the stop-loss to break even when the trade is 10 pips profitable.
• Consider placing a profit target of 20 pips, or alternatively exit when the five-period falls below the period if long, or when the five moves above the 20 when short.

Forex traders often use a short-term MA crossover of a long-term MA as the basis for a trading strategy. Play with different MA lengths or time frames to see which works best for you.

Moving Average Envelopes Trading Strategy

Moving average envelopes are percentage-based envelopes set above and below a moving average. The type of moving average that is set as the basis for the envelopes does not matter, so forex traders can use either a simple, exponential or weighted MA. 

Forex traders should test out different percentages, time intervals, and currency pairs to understand how they can best employ an envelope strategy. It is most common to see envelopes over to day periods and using "bands" that have a distance from the moving average of between % for daily charts.

If day trading, the envelopes will often be much less than 1%. On the one-minute chart below, the MA length is 20 and the envelopes are %. Settings, especially the percentage, may need to be changed from day to day depending on volatility. Use settings that align the strategy below to the price action of the day.

Ideally, trade only when there is a strong overall directional bias to the price. Then, most traders only trade in that direction. If the price is in an uptrend, consider buying once the price approaches the middle-band (MA) and then starts to rally off of it. In a strong downtrend, consider shorting when the price approaches the middle-band and then starts to drop away from it.

Once a short is taken, place a stop-loss one pip above the recent swing high that just formed. Once a long trade is taken, place a stop-loss one pip below the swing low that just formed. Consider exiting when the price reaches the lower band on a short trade or the upper band on a long trade. Alternatively, set a target that is at least two times the risk. For example, if risking five pips, set a target 10 pips away from the entry.

Moving Average Ribbon Trading Strategy

The moving average ribbon can be used to create a basic forex trading strategy based on a slow transition of trend change. It can be utilized with a trend change in either direction (up or down).

The creation of the moving average ribbon was founded on the belief that more is better when it comes to plotting moving averages on a chart. The ribbon is formed by a series of eight to 15 exponential moving averages (EMAs), varying from very short-term to long-term averages, all plotted on the same chart. The resulting ribbon of averages is intended to provide an indication of both the trend direction and strength of the trend. A steeper angle of the moving averages – and greater separation between them, causing the ribbon to fan out or widen – indicates a strong trend.

Traditional buy or sell signals for the moving average ribbon are the same type of crossover signals used with other moving average strategies. Numerous crossovers are involved, so a trader must choose how many crossovers constitute a good trading signal.

An alternate strategy can be used to provide low-risk trade entries with high-profit potential. The strategy outlined below aims to catch a decisive market breakout in either direction, which often occurs after a market has traded in a tight and narrow range for an extended period of time.

To use this strategy, consider the following steps:

• Watch for a period when all of (or most of) the moving averages converge closely together when the price flattens out into sideways range. Ideally, the various moving averages are so close together that they form almost one thick line, showing very little separation between the individual moving average lines.
• Bracket the narrow trading range with a buy order above the high of the range and a sell order below the low of the range. If the buy order is triggered, place an initial stop-loss order below the low of the trading range; if the sell order is triggered, place a stop just above the high of the range.

Moving Average Convergence Divergence Trading Strategy

The moving average convergence divergence (MACD) histogram shows the difference between two exponential moving averages (EMA), a period EMA, and a period EMA. Additionally, a nine-period EMA is plotted as an overlay on the histogram. The histogram shows positive or negative readings in relation to a zero line. While most often used in forex trading as a momentum indicator, the MACD can also be used to indicate market direction and trend.

There are various forex trading strategies that can be created using the MACD indicator. Here is an example.

• Trade the MACD and signal line crossovers. Using the trend as the context, when the price is trending higher (MACD should be above zero line), buy when the MACD crosses above the signal line from below. In a downtrend (MACD should be below zero line), short sell when the MACD crosses below the signal line. 
• If long, exit when the MACD falls back below the signal line.
• If short, exit when the MACD rallies back above the signal line.
• At the outset of the trade, place a stop-loss just below the most recent swing low if going long. When going short, place a stop-loss just above the most recent swing high.

Guppy Multiple Moving Average

The Guppy multiple moving average (GMMA) is composed of two separate sets of exponential moving averages (EMAs). The first set has EMAs for the prior three, five, eight, 10, 12 and 15 trading days. Daryl Guppy, the Australian trader and inventor of the GMMA, believed that this first set highlights the sentiment and direction of short-term traders. A second set is made up of EMAs for the prior 30, 35, 40, 45, 50 and 60 days; if adjustments need to be made to compensate for the nature of a particular currency pair, it is the long-term EMAs that are changed. This second set is supposed to show longer-term investor activity.

If a short-term trend does not appear to be gaining any support from the longer-term averages, it may be a sign the longer-term trend is tiring out. Refer back the ribbon strategy above for a visual image. With the Guppy system, you could make the short-term moving averages all one color, and all the longer-term moving averages another color. Watch the two sets for crossovers, like with the Ribbon. When the shorter averages start to cross below or above the longer-term MAs, the trend could be turning.

• The Exponential Moving Average (EMA) combination is a favored tool among day traders, providing a responsive and precise insight into fast moving markets.
• By applying this EMA trio effectively along with other indicators, you can significantly refine your entry and exit points.
• Given the volatile nature of day trading, a meticulous and adaptive approach is critical when using this tool.

Day trading is a realm of split-second decisions, where success can hinge on the accuracy and timeliness of the information at a trader&#;s disposal. Within this dynamic environment, having an effective tool that offers both speed and precision becomes invaluable. Enter the Exponential Moving Average (EMA) combination—a favorite among day traders.

Understanding the EMA Configuration

The Exponential Moving Average (EMA) is a powerful tool in a trader&#;s arsenal. Unlike its counterpart, the Simple Moving Average (SMA), which attributes equal importance to all price data, the EMA emphasizes the most recent prices. As a result, the EMA becomes a fast-reacting instrument, perfectly tailored for the quick decisions that day trading demands.

So, why the numbers 5, 8, and 13? These are Fibonacci numbers, a sequence that frequently emerges in natural patterns and is deeply embedded in trading folklore for its seeming ubiquity in market trends. While there&#;s no scientific confirmation that Fibonacci numbers can anticipate price actions, their widespread use often turns them into self-fulfilling prophecies that can influence market dynamics (because many day traders may be using them).

Why Day Traders Use the EMA

It’s Sensitive to Market Movements: With the 5-day EMA being hyper-sensitive to immediate price shifts, it offers day traders real-time insights, enabling them to act swiftly.

It Provides Some Layered Analysis: The 8-day and day EMAs serve as intermediary and longer-term measures, respectively. Their combined insights provide a more holistic view of the market&#;s direction.

It Reduces Market Noise: One of the biggest challenges in day trading is the overwhelming volume of &#;noise&#; or irrelevant data. The combined EMA attempts to filter out this noise, helping traders focus on the essential cues.

How to Use the EMA

• Prepare Your Chart: Begin by plotting the three EMAs (5, 8, and 13 periods) on your trading chart.
• Identify Momentum: A bullish trend might be brewing when the 5 EMA surges above the 8 and 13 EMAs. Conversely, a bearish inclination is suggested when the 5 EMA dives below its two counterparts.
• Add Another Indicator to Reinforce Your Trading Signal (optional): It&#;s wise not to rely solely on one metric. Reinforce EMA-based insights with other technical instruments like the Relative Strength Index (RSI) or the Stochastic Oscillator for a comprehensive reading.
• Decide On Your Exit Strategy: A common approach among day traders is to use the 5 EMA as a guide. Exiting a trade could be when the 5 EMA reverses its course, crossing the 8 EMA in the opposite direction to the initial trade.

As you can guess, the rules here are pretty loose, so it&#;s important to use sound judgment, experience, and ongoing market analysis to refine and optimize your trading strategy.

Let’s take a look at a few examples.

Example 1: ES 1-Hour Chart &#; September 13 &#; 18,

This example illustrates two longer day trades on the S&P futures using the 1-hour chart.

A: Coinciding with the NYSE market open, a trader might have opened a long position, as the EMA is in full positive position (the 5 EMA is above the 8 EMA which is above the 13 EMA). This is an Opening Range Breakout which tends to be a volatile period in trading as participants are entering their buys and sells at the same time. You would have placed a stop loss below the range swing low.

B: The ES trended steadily in this session, and the slowdown in momentum after market close (see blue rectangle) would have been a good time to close your long position with a positive return.

C: This “short” trade took place at the NYSE market open on the following day, going short upon a break below the small pre-market range.

D: This trade turned out to be more volatile and once momentum slowed after market close (see blue rectangle), it would have been a good time to close a short position, again with a positive return.

Now let’s take a look at an example of the EMA combo using a much shorter timeframe.

Example 2 : CL &#; 5-minute chart &#; September 21,

You’re looking at a 5-minute chart of crude oil futures (CL). Similar to the above example, the trade takes place upon a breakout of the opening range.

A: A long trade right at the breakout of the early morning range as the EMAs into “full sail.” It might be wise to place a stop loss below the lowest point of the range.

B: If you missed the breakout, note the following entry points that came minutes later. Price came close to (or touched) the 13 EMA but the three averages remained in “full sail” mode, indicating continued bullishness.

C: The 5 EMA dips below the 8 EMA as momentum stall; a good exit point for the trade.

Conclusion: The Combo, a Trader&#;s Ally

The EMA combination is a highly valuable tool for day traders navigating the volatility of the markets. This trio, emphasizing recent prices, helps in distinguishing significant market moves from irrelevant noise, which can help you make clearer and more informed trading decisions. When utilized effectively, it can help enhance your precision when timing entries and exits in fast-moving markets. However, given the unpredictability of markets, use this tool judiciously and remain adaptable to any changes that can signal you’re on the wrong side of the trend.

Please be aware that the content of this blog is based upon the opinions and research of GFF Brokers and its staff and should not be treated as trade recommendations.  There is a substantial risk of loss in trading futures, options and forex. Past performance is not necessarily indicative of future results.

Be advised that there are instances in which stop losses may not trigger. In cases where the market is illiquid–either no buyers or no sellers–or in cases of electronic disruptions, stop losses can fail. And although stop losses can be considered a risk management (loss management) strategy, their function can never be completely guaranteed.

Disclaimer Regarding Hypothetical Performance Results: HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

T-Line stands for Trigger Line and is 8 EMA, concept invented and taught by American trader Steven Bigalow.
He uses daily 8 EMA and stays in trades as long as price is above or below 8 daily ema. If price closes below or above 8 daily ema in the opposite direction he exits.

I went further with this concept, implementing Multitimeframe 8 ema trading system which is very effective. For that one needs indicator able to plot higher resolution EMAS on lower resolution charts (Moving Average Collection by Wataru Inoue can do that - eunic-brussels.eu - better than TradingvIew MTF ma function). But you need a powerful PC (8 GB RAM at least) as many PC freeze when applying MTF indicators especially on many charts.

For exits, reversal or entries you may add Pivots (Camarilla, Fibonacci Pivots seem to be most effective resistance support levels, especially longterm ones yearly, monthly, weekly). But you are free tp use Ichimoku, daily, monthly, weekly highs, lows or whatever level tools convinient.

At least this system will help you to stay on the right side of the market. This sytem works well with gold, oil, sp, eurusd, btcusd and many other pairs.

Good luck my friends!

Hello everyone!

I thought that I would like to contribute with a simple scalping system that I came across. It seems to work very well and can be used to make 10 pips a day or even more! Any help to improve this strategy is appreciated.

The price usually make a small retracement almost everytime a candle opens above/below the 5 EMA when the market is not in a trend, this strategy works best when the market is ranging. This usually happens before a trend starts and when a trend ends.

Let’s get to it!

Setup
Any pair, I prefer EUR/USD
Time frame: 5 Min
5 EMA High
5 EMA Low
(See attachments for the Template)

Rules

Entry sell: If a candle opens ABOVE the 5 EMA high SELL

Entry Buy: If a candle opens BELOW the 5 EMA BUY

Take profit: 5 pips or take what you can get!

Stop loss: I use 8 as stop loss but i’m unsure on this one, any suggestions would be appreciated!

Please read all posts before you start trading, there’s alot of usefull information!

Entry example, result example, template and an optional indicator to see time left on each candle is attached below
Note: I did not take all the trades in the Result example, it’s just an example of trade opportunities

Template and candletime eunic-brussels.eu ( KB)