Two EMA Cross+ indicators
Hello traders!
Today we will demonstrate the heuristics of the classical EMA indicator. We decided to simplify your sales force and add some metadata. So let’s take it from the beginning and first talk about what it is EMA, and then I will tell you why our indicator is extremely convenient and useful.
So what is EMA?Exponential moving average(EMA) is a type of moving average (MA), which gives more weight and significance to the most recent data.Exponential moving average also called exponential weighted moving average. Exponentially weighted moving average reacts more significantly to recent price changes than simple moving average ( SMA), which applies equal weight to all observations in a period.
Key findings:
– EMA is a moving average that gives more weight and significance to the most recent data.
-Like all moving averages, this technical indicator is used to generate buy and sell signals based on crossovers and divergences from the historical average.
As is known,EMA Cross is one of the main and most popular entry indicators. It’s quite easy to understand and even easier to use. This indicator consists of two EMAs – fast (red line) and slow (blue line). Fast EMA– This EMA shorter length than fast EMA(default parameter is 9). Thus, it reacts to price changes more actively than a slow one. We can say that it takes into account the most current price movements. If we talk about slow EMA(default parameter 30), then it is more inert and its action is more difficult to change significantly. It can be said that EMA“looks” more accurately at historical data, but does not forget about real price movements.
But how does it work? Trivial. When it’s fast EMA crosses the slow bellows, she gives bearish signal, whereas when it crosses above it, it bullish signal. Moreover, we have added some “confirmation” factor. As you know, when the price is above the slow EMA, slow EMA plays the role of a support line for the price and means that the price is in an upward trend. Thus, when we see a crossover at the top and it goes below the price, we called it “strong”bullish signal.” When the price is below the slow one EMA, slow EMA is resistance. So when we see the cross under the slow EMA indicator, we call it “strong”bearish signal.”
To make the trading process easier for you, we have marked the locations of the crosses on the chart and added descriptions of the crosses. The flags indicate the place of the cross. The default parameters have a good backtest on the 1H chart. However, you can also change them depending on your goals and time period. The intersection points look like flags (a red flag is a bearish cross, a green flag is a bullish cross). As you can see, it’s really convenient.
I hope you enjoy our classic heuristic EMA Cross. We are confident that the metadata we take into account makes signals more accurate and trades more profitable. The SkyRock team, with the support of Trading View, will try to make your trading process more successful and profitable. Every day we work together to improve both your skills and your trading balance. We hope this is really useful for you, dear traders!
Release Notes: Hello traders!
After we saw our EMA Cross Indicator, we ran a lot of tests to see how it performed. We see that the signals in a volatile market are very weak. So we decided to add a filter that disables the sideways signaling script. We decided to make a volatility filter. In my opinion, the best indicator of volatility is Bollinger Bands. It is very sensitive and picks up “explosions” very well. So how does it work?
The process of generating signals for long/short positions is similar. However, if the BB Width value (the width of the channel between the upper and lower line of the Bollinger Bands) is less than the average of the previous values (as many as you can adjust, default is 10), the signal appears false and does not appear. This significantly reduced the number of incorrect signals.
Well guys, I hope you enjoy my script and make it part of your sales force. Write down in the comments what are the pros and cons of using it. Have a nice trading day!
Feel free to copy and use this script for your own ideas and trading!
If you would like to access the indicator, please send us a private message or leave a comment
How to get the script?
If you want to access the script, you should contact us via private message or send an email to [email protected]