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MA

EMA/SMA/WMA

Overview

The Moving Average (MA) is a widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random short-term price fluctuations. It is a trend-following, or lagging, indicator because it is based on past prices.

Interpretation

The Moving Average is interpreted as follows:

  • When the price crosses above the moving average, it suggests that the trend is upwards, and it might be a good time to buy.

  • When the price crosses below the moving average, it suggests that the trend is downwards, and it might be a good time to sell.

Indicator Triggers:

Different MA types are available to pick, the same rules applies for all

In Zone: Price is greater/lower than the EMA

We want to place a long signal as long as the price is higher than the 1 hour EMA with a period of 50.
A long signal is triggered during all the selected zone, which is all the time when the price is higher than the EMA.

Price cross up/down the EMA

We want to long only after the price has crossed up the 1 hour EMA (period 50). The signal will be active only during the following 1 hour candle.
A long signal is triggered just after the EMA crossed up the price during 1 candle time, and not all the time when EMA is higher.

Cross between 2 MAs

We want to long when the first EMA with a period of 10 cross up a second EMA with a period of 50.

A long signal is triggered during 1 hour as soon as the main EMA cross up the second EMA at the green arrow.

Touch Line

A long signal is triggered if price touch down the MA line.
A long signal is triggered as price touched down the MA line.

Option : Includes price reversal into the candle wick

Feature available on some bands / line indicators

If this option is deactivated, the touch is triggered only if the opening of the candle is in the correct zone (touch up = opening below the trigger price).

With this option activated, even if we start above the trigger price (in the case of a touch up), if during the candle the price dumps below the trigger price and then reverses above, then we trigger at the moment of the internal touch up.

Note : for now, whether it's ON or OFF it only triggers once per candle max (duration of the trigger for the rest of the candle).

Example with this option OFF :

Deactivated feature Includes price reversal into the candle wick.

Example with this option ON :

Activated feature Includes price reversal into the candle wick.

Notes :

  • Multiple EMAs: Using two EMAs (a fast and a slow one, like 10-day and 50-day) can provide a clearer signal. A bullish trend signal is given when the faster EMA crosses above the slower EMA, suggesting it’s a good time to buy. Conversely, when the fast EMA crosses below the slow EMA, it could be time to sell.

  • Price Distance from EMA: Look for instances where the price moves significantly away from a chosen EMA—say, 2 standard deviations (this can be visually estimated or measured using tools like Bollinger Bands or a percentage filter). Such extremes can indicate overextended markets ripe for reversals.

  • Confluence with Other Indicators: To confirm mean reversion signals, use other indicators like RSI or Stochastic. For instance, if the price is far below the EMA and the RSI is in oversold territory, it may signal a good buying opportunity.

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