The most common ones used in trading are the SMA (simple moving average), EMA (exponential moving average), and MACD (moving average convergence divergence). There are different types of moving averages as we briefly mentioned before. I do not trade 9 EMA alone, because it is vulnerable to sideways choppy prices (just have a look at the last several candles on the first screenshot with RSI - candles dance back and forth around 9 EMA as the price moves sideways). This gives you a good idea of the overall trend of a stock.

Note, that poking trough the Moving average without closing on the opposite side of it doesn't count, also doesn't count when price Closes right on the moving average.Īdditional note: I use 9 EMA to time my entries. I like 9 EMA.īesides entries, 9 EMA can also be used for exits, where the same principle works: once price Closes on the opposite side of 9 EMA, you exit. Traders can use whatever Moving average they like: 5 EMA, 10 SMA etc. I used to scalp on 5 min charts entering with 9 EMA, now I use it successfully for daily charts with the same good result. This method helps me to know when exactly I will enter, and so I have no second doubts about 'acting now or waiting a bit longer'.ĩ EMA Entry works on any time frame. After I get an entry signal from other indicators, I wait till a price bar Closes above 9 EMA to enter Long, or Closes below 9 EMA to enter Short. Things like divergence are even more difficult: at which point after you've spotted a divergence you are going to enter? Same for Stochastic lines, which can cross multiple times before price actually decides to move in either direction. Sometimes moving averages that produced a cross would straighten back or as I like to say 'uncross', and you'll be left with a false signal and a losing trade. Sometimes it will work, sometimes you would wish you have waited a bit more before entering. Usually you would just visually double check that there is a signal from your indicator and then enter on the close of a signal bar.

When your trading strategy says: enter on the cross of Stochastic lines, on the cross of MACD lines, when RSI comes from oversold/bought zone, when two moving averages cross, when divergence occur etc etc.

13 erma vs 9 ema stock market reddit