Two Exponential Moving Averages
From Timetotrade
timetotrade can be used to create Exponential Moving Average Alerts that will notify you by mobile phone, instant messenger or email when your Exponential Moving Average rule based investment conditions are met. Use timetotrade to avoid missing trading opportunities regardless of how busy you are...and when it’s time to trade we’ll let you know.
What is an Exponential Moving Average Indicator
The Exponential Moving Average indicator (EMA) is used to reduce the lagging on the moving average. This is achieved by applying more weight to recent prices relative to older prices. With weighting applied the Exponential Moving Average will react quicker to recent price changes compared to a Simple Moving Average. The red and light green line on the 'Two Exponential Moving Average' charts are two independent Exponential Moving Averages. You can use 'Two Exponential Moving Average' charts to display for example the price and corresponding 50 day and 100 day Exponential Moving Averages.
What are 'Two Exponential Moving Average' Alert Triggers used for?
To select the chart with two Exponential Moving Averages, selected 'Two exp. mov averages' from the Chart selection drop down box on the Charts tab. The following chart will be displayed with a default 10 and 20 day moving average, whereby the 'Red Line' is the determined by the value in 'ema1' and the 'Green Line' is determined by the value in 'ema2'. The following chart displays the Price movement for Walgreen based on a one year view and a daily interval period, with the 20 day and 50 day Exponential Moving Average over-laid.
To change the ema1 and ema2 Exponential Moving Average values, enter the new values in the appropriate text box and press the 'enter' button on your keyboard, or alternatively click on the 'update' button on the bottom left of the page.
A basic trading strategy is to take a long position when the 'fast' Exponential Moving Average i.e. the Exponential Moving Average with the shortest time period, such as the 20 day Exponential Moving Average, rises above the 'slow' Exponential Moving Average such as the 50 day Exponential Moving Average, and then sell when the 'fast' Exponential Moving Average drops below the 'slow' Exponential Moving Average.
Two EMA Alert Triggers are available:
- Positive Crossover trigger: Select this trigger if you want to receive an alert to notify you when the Red Line (ema1) rises above the Green Line (ema2).
- Negative Crossover trigger: Select this trigger if you would like to receive an alert to notfiy you when the Red Line (ema1) drops below the Green Line (ema2)
Use the 'One Click' alert creation button beside each trigger to immediately create and activate the alerts.
More information on how to use the timetotrade system to create Exponential Moving Average Alerts can be found on the Creating an Alert pages.
timetotrade can also be used to create alerts on Price and Volume as well as the technical indicators: Stochastic, Bollinger Bands, RSI, MACD and Moving Averages.
Further Reading
- How to Create Alerts using timetotrade
- More Information on Creating Alerts
- Lagging Indicators
- Leading Indicators
- Support Level
- Resistance Level
- Trend Lines
- Private Investor User Manual table of contents
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