So maybe this is the first time you’ve heard about it, but in any event, I’ll try to keep it interesting. Here’s where we start. With a chart:
- Exponential Moving Average - EMA 5 (Red)
- Exponential Moving Average - EMA 13 (Blue)
- Exponential Moving Average - EMA 62 (Green)
You can easily see that when the 13 crosses below the 62, it seems like we are in a downward trending situation. The inverse is also true (although we cannot see it in the chart above): if the 13 crosses above the 62, it seems like we are in an upward moving trend.
That’s not quite everything, so we need to move on and do some more investigation.