-> 6 Exponential Moving Averages
-> 6 Simple Moving Averages
-> There is also a weekend background marker ideal for cryptocurrency trading
Using all these indicators in conjunction with each other provide great confluence and confidence in trades and price targets.
An explanation of each indicator is listed below.
What Is an ( )?
"An ( ) is a type of moving average (MA) that places a greater weight and significance on the most recent data points. The is also referred to as the exponentially . An exponentially reacts more significantly to recent price changes than a ( ), which applies an equal weight to all observations in the period.
What Does the Tell You?
The 12- and 26-day exponential moving averages (EMAs) are often the most quoted and analyzed short-term averages. The 12- and 26-day are used to create indicators like the moving average convergence divergence ( ) and the percentage ( ). In general, the 50- and 200-day EMAs are used as indicators for long-term trends. When a stock price crosses its 200-day moving average, it is a technical signal that a reversal has occurred.
Traders who employ 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 are, by their very nature, lagging indicators."
Popular lookback periods include fibonacci numbers and round numbers such as the 100 or 200. The default values of the EMAs in this indicator are the most widely used, specifically for cryptocurrency but they also work very well with traditional.
EMAs are normally used in conjunction with Simple Moving Averages.
"What Is ( )?
A ( ) calculates the average of a selected range of prices, usually closing prices, by the number of periods in that range.
Simple Moving Average vs. Exponential Moving Average
The major difference between an ( ) and a is the sensitivity each one shows to changes in the data used in its calculation. More specifically, the gives a higher weighting to recent prices, while the assigns an equal weighting to all values."
In this indicator, I've included 6 popular moving averages that are commonly used. Most traders will find specific settings for their own personal trading style.
Along with the and , another indicator that is good for finding confluence between these two is the .
"What is the Cloud?
The is a collection of technical indicators that show levels, as well as momentum and trend direction. It does this by taking multiple averages and plotting them on the chart. It also uses these figures to compute a "cloud" which attempts to forecast where the price may find support or resistance in the future.
The was developed by Goichi Hosoda, a Japanese journalist, and published in the late 1960s.1 It provides more data points than the standard chart. While it seems complicated at first glance, those familiar with how to read the charts often find it easy to understand with well-defined trading signals."
More info can be seen here: https://www.investopedia.com/terms/i/ich...
I have changed the default settings on the to suit cryptocurrency trading (as cryptocurrency is usually fast and thus require slightly longer lookbacks) to 20 60 120 30.
Along with the , I like to use to not only find confluence for but for price discovery targets and trend strength.
"What Is a Band®?
A Band® is a tool defined by a set of plotted two standard deviations (positively and negatively) away from a ( ) of a security's price, but which can be adjusted to user preferences.
Bands® were developed and copyrighted by famous technical trader John , designed to discover opportunities that give investors a higher probability of properly identifying when an asset is oversold or overbought."
This article goes into great detail of the complexities of using the and how to use it.
This indicator combines all these powerful indicators into one so that it is easier to input different settings, turn specific tools on or off and can be easily customised.
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