Which is better EMA or SMA?

September 2022 · 6 minute read

SMA calculates the average of price data, while EMA gives more weight to current data. … More specifically, the exponential moving average gives a higher weighting to recent prices, while the simple moving average assigns equal weighting to all values.

Moreover, How do you use 50 DMA?

The rule to close 50-day moving average trades is very simple. Hold your trades until the price action breaks your 50-day moving average in the direction opposite to your trade. If you are long, you close the trade when the price breaks the 50-day SMA downwards.

Should I use 50 EMA or SMA?

The more accurate a moving average is as a trend indicator, the more useful it is for traders and analysts. … Long-term trend traders commonly use the 50-day SMA, whereas intraday stock or forex traders often employ a 50-day exponential moving average or EMA on a one-hour chart.

Also Which moving average is best? When it comes to the period and the length, there are usually 3 specific moving averages you should think about using: 9 or 10 period: Very popular and extremely fast-moving. Often used as a directional filter (more later) 21 period: Medium-term and the most accurate moving average.

What is the best EMA for day trading?

The 8- and 20-day EMA tend to be the most popular time frames for day traders while the 50 and 200-day EMA are better suited for long term investors.

18 Related Questions Answers Found

What is a 50 EMA?

EMA 50 is an Exponential moving average calculated for the past 50 periods. … The position of the moving average relative to the price indicates the trend. Traders use a moving average with a longer period to calculate the long term trends. A shorter period moving average shows the short term trend.

Which moving average is best for intraday?

5-, 8- and 13-bar simple moving averages offer perfect inputs for day traders seeking an edge in trading the market from both the long and short sides. The moving averages also work well as filters, telling fast-fingered market players when risk is too high for intraday entries.

Is moving average a good indicator?

The moving average is an extremely popular indicator used in securities trading. It can function as not only an indicator on its own but forms the very basis of several others. … The exponential moving average (EMA) weights only the most recent data. Moving averages work best in trend following systems.

What EMA should I use?

The most commonly used EMAs by forex traders are the 5, 10, 12, 20, 26, 50, 100, and 200. Traders operating off of shorter timeframe charts, such as the five- or 15-minute charts, are more likely to use shorter-term EMAs, such as the 5 and 10.

What happens when EMA crosses SMA?

Shortly after, the EMA crosses above the SMA signaling a potential change from a downtrend to an uptrend. In this area, traders would exit their sell positions and may choose to reverse with a buy order to establish a long position.

What is the 9 EMA?

In this case, the 9-EMA is our short-term moving average, while the 30-EMA is out long-term moving average. … The two moving averages need to be apart from each other (see chart below) The first bar that closes below the 9-EMA will be used as the trigger bar for the buy setup.

What EMA should I use?

Short-term traders typically rely on the 12- or 26-day EMA, while the ever-popular 50-day and 200-day EMA is used by long-term investors. While the EMA line reacts more quickly to price swings than the SMA, it can still lag quite a bit over the longer periods.

How do you trade a 15 minute chart?

Your brokerage would typically be Rs 20 to Rs 50 per lot PLUS Taxes. Trading one lot cost you up to Rs 500 in brokerage (100) and taxes (400). To break even, you’d need a movement of 7 points minimum.

What is 50 EMA used for?

The 50-day EMA gives technicians a seat at the 50-yard line, the perfect location to watch the entire playing field for mid-term opportunities and natural counterswings after active trends, higher or lower. It’s also neutral ground when price action is often misinterpreted by the majority.

What is EMA 12 EMA 26?

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 (MACD) and the percentage price oscillator (PPO).

Which indicator is best for day trading?


Best Intraday Indicators

Which timeframe is best for intraday?

Best Time Frame for Intraday Trading

Intraday traders (also called day traders) use time frames between 5-minutes to 60-minutes. The more commonly used are 15-minute and 30-minute timeframes on the chart. In India, the market is open between 9:15AM to 3:30PM.

Which indicator is best for intraday?


Best Intraday Indicators

Which is the best tool for intraday trading?


Top-6 Free Intraday Trading Tools 2021

What is the best MACD setting for day trading?

MACD(6,35,6) is more sensitive than MACD(12,26,9) and can be a better MACD setting for weekly charts. When traders use M5 or M15, or M30 chart time frames in day trading, the best performance is obtained using standard MACD settings for day trading (12,26,9).

Which timeframe is best for day trading?

Best Time Frame for Intraday Trading

Intraday traders (also called day traders) use time frames between 5-minutes to 60-minutes. The more commonly used are 15-minute and 30-minute timeframes on the chart. In India, the market is open between 9:15AM to 3:30PM.

What is the most accurate indicator?


Some of the most accurate of these indicators include:

  • Support. …
  • Resistance. …
  • Moving Average (MA) …
  • Exponential Moving Average (EMA) …
  • Moving Average Convergence Divergence (MACD) …
  • Relative Strength Index (RSI) …
  • Bollinger Bands. …
  • Stochastic Oscillator.

    • What does the EMA tell you?

    The exponential moving average (EMA) is a technical chart indicator that tracks the price of an investment (like a stock or commodity) over time. The EMA is a type of weighted moving average (WMA) that gives more weighting or importance to recent price data.

    What is EMA strategy?

    An exponential moving average strategy, or EMA strategy, is used to identify the predominant trend in the market. It can also provide the support and resistance level to execute your trade.

    How is EMA used in stocks?

    You can use the EMA in your trading strategies in the same way you use other moving averages. Accordingly, you should identify the trend direction or look for a buy or sell signal using two exponential moving averages with different time frames.

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