|
PureBytes Links
Trading Reference Links
|
I have been using a 'rainbow' of EMAs. I find the rainbow approach
allows me easily see the momentum of price moves and the extent of
retracements. The first is seen from the extent by which the ST EMA runs
away from the LT EMAs. The second comes from which EMA is hit by a
retracement.
When I started using this approach, I used round numbers -- EMAs of
10/30/50/100/200 days. This worked well enough, although penetration of
an EMA was not precise, ie, lines tended to be exceeded slightly rather
than touched before a bounce the other way. I found that using a cycle
more in tune with the calendar worked better: 10/31/62/125/250 (trading)
days. But I have not tested this with any rigor.
Regards
Dan Goncharoff
|