An EMA is a very common trend indicator. It reacts quicker than the Simple Moving Average to price changes.
How does it do it? The EMA gives greater weight to the latest closing prices of the moving average. That is, the most recent price levels will determine to a greater extent the development of the moving average.
Like the SMA, traders use this indicator to spot trends and trend reversals. This is done by crossovers between a fast and a slow moving average.
When the fast moving average crosses the slow one upwards, a buy signal will be generated since the price can be starting a bullish trend. On the other hand, when the fast moving average crosses the slow one downwards the opposite happens, the bears are taking over and a sell signal is open.
What strategies does Bottrex provide for this indicator?
- Default: The robot checks that the last 2 closed candles are above ALL EMAs. It also checks if the antepenultimate candle (third) is below all EMAs. For sales strategy, he does the opposite.
- Default (any period): Same function as the "Default" strategy, with the difference that you execute the buy if the condition is favorable in ANY Ema. For sell strategy, it does the opposite way.
- Default (with verification): You define a period and the bot will then check if the current price is Above All EMA's and if the price was Below All EMA's in previous candles (For the period defined by the user). For example: Period 10. The bot checks if the current price is above all EMAs and checks the last 10 candles if the price was below EMAs. For sell strategy, it does the opposite way.
- Upward crossing: Checks whether there was an upward crossing from the smallest to the largest emu.
- Downward crossing: Checks if there was a downward crossing from the smallest to the largest emu.
- Alignment (buy): When the largest EMAs are below the smallest. For example, 305 below 144, 144 below 72, 72 below 17
- Alignment (sell): When the largest EMAs are above the smallest. For example, 305 above 144, 144 above 72, 72 above 17
- Price above emas: It gives a favorable condition when the current and penultimate price are above all EMAs (without checking previous periods).
- Price below emas: It gives a favorable condition when the current and penultimate price are below all EMAs (without checking previous periods).