Keeping track of EMAs
As we progress as traders, a lot of times we forget those things that are the touchstones to understanding price movement. For me, nothing has been more important than exponential moving averages.
An exponential moving average is a moving average.
Simply put, it’s the average of the previous close highs and lows, set to a certain number of periods. We can look back at the last twenty candles, thirty candles, a hundred candles on the 5 minute charts, the daily, the weekly etc. When you make it an exponential moving average, we’re still taking an average, but the more current price action is weighted heavier within the average.
When we get closer to current price action, the price action is weighted heavier within the average. What does that mean and why is that so important? Why do I use exponential moving averages versus simple moving averages?
That’s a lot to think about, isn’t it? How do I keep track of all these EMAs?
Check out this video to learn about Propulsion dots – we use an automated indicator that I refer to as “propulsion” or “prop” dots. By using my propulsion dots indicator I can keep all of these moving averages on my charts.
