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If you have ever studied Arithmetics. I bet you you must have dealt with the chapter of averages and moving averages is just an extension of the same. In trading, traders use moving averages line to find possible upcoming trends and reversals.
The moving average has three family members.
=> SMA ( Simple Moving Average )
=> EMA ( Exponential Moving Average )
=> WMA ( Weighted Moving Average )
In my last article, I have already covered everything about SMA ( Simple Moving Average). In this article, I am going to cover EMA (Exponential moving average) .
EMA or Exponential Moving Average is a trend indicator widely used by traders to find upcoming trends and reversals. It is a type of moving average that emphasises more weight on the most recent price data. The calculation of EMA involves a smoothing factor to the previous period’s EMA value and adding a fraction of the difference between the current price and the previous EMA value.
EMA = (Close – EMA(previous day)) * Smoothing Factor + EMA(previous day)
Setup Exponential Moving Average on Quotex
To set up Exponential Moving Average on Quotex. You first need to log in to your Quotex account in case you don’t have one you can sign up using this link.
Once you sign up you will land on the Quotex dashboard. Next, click on the indicator button.
Now, search for moving average and select the name. set the type as EMA and change the line colour for better visibility.
How to trade with Exponential Moving Average on Quotex Trading Platform
Trading with an Exponential Moving Average on Quotex is not a difficult job. There are two ways of trading with an Exponential Moving Average either you can use it solo or you can use the combination of two moving averages.
Solo EMA: You can use the EMA indicator solely on the Quotex trading platform. You just need to focus on the intersection of price and moving average. when the EMA line intersects above the price it signals a bearish trend and vice when the EMA intersects below the price it signals a bullish trend.
Combination: If you really want to achieve best results with the EMA indicator you should definitely try the combination of two moving averages. To set two moving averages click on the indicator and select EMA from the menu once again and set the period to 14 and 29.
When the Exponential Moving Average line 14 intersects line 29 from the bottom and later line 14 dominates and stays above the same it is the indication of an upcoming bullish trend and here we can place a buy trade. vice versa when the Exponential Moving Average line 29 intersects line 14 from the top and later line 29 dominates and stays below the same it is the indication of an upcoming bearish trend and here we can place a sell trade.