Place perfect trades with Exponential Moving Average (EMA) on Deriv

 

Exponential Moving Average Basics

Exponential Moving Average or EMA is a technical analysis tool that measures the average price of a security just like SMA however, the Exponential Moving Average weighs more on the most recent price data and can give you a better signal against the SMA indicator.

The Exponential Moving Average is a lag indicator that determines the direction in which the security price is moving. This indicator uses the historical price data based on which traders can identify the possible price movements and reversals of a security.

The formula for EMA is: ( K * ( C – P ) ) + P

Here, C=  Current Price

P = Previous period EMA

K = Exponential Moving constant

How to set up Exponential Moving Average on Deriv?

 

Exponential Moving Average on Deriv

 

In order to add Exponential Moving Avergae on Deriv. Firstly, visit their homepage. and register a free account. once done you will land on the trading dashboard. Now, click on the chart button and set up your default chart to candlestick next, click on the indicator button and search for Moving average in the list now, set the type as Exponential Moving Average and make necessary changes as per your trading nature.

How to choose a perfect period for Exponential Moving Average on Deriv?

The Exponential Moving Average is a sensitive indicator that reacts much more faster than Simple Moving Average. However, If you want to better results with this indicator you need to set the period according to your trading nature.  If you are a trader who trades in a long time frame chart of 1 hour or above you should consider the period of 50 -200 similarly, If you are a trader who trades in a short time frame chart for like 30 minutes you should consider 12 and 25 period.

How do you trade with Exponential Moving Average on Deriv?

Trading with an Exponential Moving Average is an easy job. You just need to focus on the intersection of the price and moving average line. There are two ways of trading with an Exponential Moving Average on Deriv.

 

How do you trade with Exponential Moving Average on Deriv?

 

 

Solo EMA: You can use Exponential Moving Average solely on the Deriv chart. when the price intersects above the EMA line it signals a bullish trend and vice versa, when the price intersects below the EMA line it signals a bearish trend.

 

 

EMA Combination: You can even use two EMA on Deriv chart. For Instance, let’s use EMA periods 12 and 25. when the EMA line 12 intersects above line 25 it signals a bullish trend and vice versa, when the EMA line 12 intersects below line 25 it signals a bearish trend.