Today is the first day of 2023. I wish you all the best when trading, if you go long, you will see a sharp rise, and if you go short, you will see a sharp fall~
Returning to the topic, the trading technique I want to share today is the moving average system that I have used for 5 years.
Simply put, it is EMA 5-10-20-30-60-120 (I will boldly mark the important content in the article)
Indicator introduction: EMA is the index average indicator and is a trend indicator. Its construction principle is: a weighted arithmetic average of the closing prices is used to determine the trend of future price trends.
PS: The price is above the moving average, and every moving average below is a support.
PS: The price is below the moving average, and every moving average is a resistance.
The indicator settings are as follows. For everyone's convenience, I directly upload the demonstration chart on the APP. As follows: Figure 1-4
We click on the two bars in the upper right corner to enter settings
Click on the indicator and select EMA indicator settings
最后把我所需要的均线一一对应即可回到盘面
After setting it up, when you return to the chart, be sure to click on the EMA below and turn off other unnecessary indicators, as shown in Figure 4
This is a set of trend indicators as well as a set of support and pressure indicators. Below I will explain in detail with actual charts
The 5-10 day moving average is a short-term/short-term price/trend line. Many people may have heard of the words golden cross and dead cross, but they don’t quite understand the meaning behind it. The golden cross represents an upward crossover of the moving average, and the dead cross is The moving average crosses below.
The 20-day line serves as a link between the past and the future.
The 30-day moving average is usually called the "lifeline" by most people. As the name suggests, if the price can stand above the 30-day EMA for more than three days, it is regarded as a phased trend with a good, healthy and sustained upward trend.
The 60-day line serves as the bull-bear transition cycle line.
The 120-day line is the most important dividing line between bulls and bears in my opinion. If the daily price can perfectly support above the 120-day line, I usually think it is a deep correction that has not completely broken the current trend. In the follow-up, we need to observe the price when there is enough volume to break through the 120-day line.
Figure 2-1. For the daily chart of #BTC, the moving average crosses upward to form a golden cross, and the moving average crosses downward to the right to form a dead cross.
When we see an upward golden cross on the moving average, it is a very good trend, and the price is constantly reaching new highs.
When the moving average on the right is about to cross, it is a downward trend, and the price continues to hit new lows.
Above we mentioned that the 120-day line is the key dividing line between bulls and bears. Let’s look at Figure 2-2
As shown in Figure 2-2, the place I marked is a very important knowledge point.
For the first time it fell, the price rebounded after receiving key support from the 120-day line (if you set up this moving average system, when the price falls, we can expect where the price will fall to find support) This is A very important thing in doing transactions. You need to go first.
After the price was supported by the 120-day line, it rebounded. The rebound price failed to reach a higher high and subsequently reached a lower low. This can be regarded as the end of this upward trend. Don't enter the field to catch the throwing knives at this time.
图2-3
We see the 4 arrows above. After#BTCfell below the 120-day line, every time the price touched the 120-day line, it was a strong resistance, and each time the decline was huge. At this time, we should understand that It is still a bearish trend.
Figure 2-4 shows the trend of our recent market. We can clearly see that the price is still suppressed by the 120-day moving average. And failed to break through despite repeated attempts.
Due to time constraints and the length of the article, in order to prevent everyone from reading fatigue, I will temporarily update the description of the 120-day line, and will continue to update this moving average system in the future.
We will also explain how to better use the EMA moving average indicator from a short-term perspective.
If my article is helpful to you, please like + follow it. Thank you all for your support. Pen refill~💛I also wish that my number of fans in Binance Square can exceed 5 digits in the new year.