Detailed explanation of the combined EMA strategy and candlestick charts

One, key features of the EMA

The Exponential Moving Average (EMA) gives more weight to recent prices, responds faster than the Simple Moving Average (SMA), and is suitable for capturing changes in trend. The parameters used include:

- Short-term EMA: 5, 12, 20 (capture short-term fluctuations)

- Medium-term EMA: 50, 100 (judge the medium-term trend)

- Long-term EMA200 (dividing line between bullish and bearish)

Two, use of EMA in charts of different periods

1. Ultra-short trading (1 to 15-minute chart)

- Applicable scenarios: high-frequency trading, speculation

- Parameter combination: EMA(5)+EMA(20)

- Strategy:

- Golden cross/death cross: buy when EMA5 crosses above EMA20, sell when it crosses below.

- Price and EMA relationship: price remains above EMA5 and the slope is upward, trade in the direction of the trend.

- Filter noise: combine with overbought/oversold RSI (>70/<30) to trade against.

- Case: on a 15-minute chart, when EMA5 crosses above EMA20, if the trading volume expands, it can be considered a valid signal.

2. Intraday trading (hourly chart/4-hour chart)

- Applicable scenarios: intraday swing trading

- Parameter combination: EMA(12)+EMA(50)

- Strategy:

- Trend confirmation: EMA12 above EMA50 and the two lines diverge upwards, the bullish trend is established.

- Retracement at EMA support: buy on the dip when the price retraces to EMA12 or EMA50.

- Divergence signals: new price highs but EMA does not reach new highs, be alert for reversal.

- Case: on the hourly chart of EUR/USD, after the price retraces to EMA50, bounces back, along with a decrease in MACD line volume, a long position can be taken.