The Double EMA trading strategy

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Exponential Moving Average Crossover

The Exponential Moving Average (EMA) Crossover is one of the top 50 crossover strategies within the Moving Average trading system. This options trading strategy is used in the options trading market.

Moving average strategies are technical indicators; they provide signals for buying and selling options. These indicators provide objective buying and selling points, which removes all guesswork.

Chuck Hughes uses an intricate EMA crossover strategy to calculate buying and selling points within the options trading system. Using Chuck Hughes as your options trading expert can increase your chances of success and reduce your risk of loss.

If you’re ready to learn options investing strategies, call (866) 661-5664 or Get More Information about Chuck Hughes’ exclusive moving average crossover strategies.

Exponential Moving Average versus Simple Moving Average

An EMA is different than an SMA (Simple Moving Average). An EMA is similar to an SMA in most regards, except for the amount of weight that is distributed to the data. An SMA is built upon an equal distribution of weight for the entire data set. An EMA assigns a greater amount of weight to the most recent data points and less weight to the most historical data points. This is why an EMA is also called an ‘exponentially weighted moving average’.

An EMA is viewed as being more accurate than an SMA by many options trading strategists because of its weight distribution. However, EMAs react more quickly to changes in price than SMAs . While the EMA strategy produces faster results, this options trading strategy can also provide false signals.

Many options traders use a combination of both options trading systems to create a comprehensive options trading strategy.

It can be confusing to understand the appropriate times to use an EMA or an SMA. It’s smart to rely on a professional and successful options trader when venturing into moving average crossovers. Whether you’re new to the options trading market, or an experienced trader just looking to get that edge on the options trading system, Chuck Hughes can help provide guidance.

If you’re ready to start trading options using moving average crossovers, call now at (866) 661-5664 to get more information about his exclusive options trading strategies.

Exponential Moving Average Crossover versus Moving Average

A moving average (MA) is the price of an asset over a certain amount of time. An EMA crossover is the point at which two moving averages of different lengths cross over each other. An MA looks like a bell-shaped curve. This curve represents the long-term trend of a market asset within the options trading system

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Shorter moving averages will be faster because they are more sensitive to daily increases and decreases within the market. Conversely, longer moving averages will be slower because they are not as sensitive to daily market increases and decreases. Moving averages lag because they are indicators that look backwards instead of forwards.

Exponential Moving Average Crossover Strategies

A moving average crossover is an options trading strategy that is used to identify changes in market trends. It can be used to predict appropriate buying and selling points. A crossover happens when a short-term (faster) moving average crosses a long-term (slower) moving average. A moving average crossover is indicative of a coming change in trend.

EMA crossovers are extremely popular options investing strategies because of their objectivity. An EMA crossover will indicate a buy signal when the short term moving average crosses above the long term average. Conversely, an EMA crossover will indicate a sell signal when a short term average crosses below a long term average.

In the options trading system, there are many types of EMA crossover strategies. EMA crossover strategies provide different ways to analyze trends within the options trading market. Because MAs are lagging indicators, complex strategies are used to improve their respective lag in order to create faster indicators, while still maintaining their accuracy. The objective is to create the most reliable crossover strategy.

Options Investing Strategies: Price Crossover

Traders use price crossovers to identify variance in momentum. Price crossovers are a basic EMA crossover strategy used to determine buy and sell points within the options trading system.

A price crossover occurs when the price of an asset travels from one side of an MA to the other. When it reaches its destination on the other side, it closes. A buy signal is indicated when the shorter MA crosses above the longer MA. This indicator is representative of an uptrend. A sell signal is indicated when the shorter MA crosses below the longer MA. This indicator is representative of a downtrend.

Options Trading Strategies: Double EMA Crossover

A double EMA crossover is a calculation of both single and double EMAs. Double exponential moving average crossovers provide traders with the advantage of representing larger term trends with less lag time. This means they have a higher accuracy rate which can lead to a reduced risk of loss.

Double crossovers respond more quickly to market trends than single crossovers. As such, these indicators can spot trend reversals quickly, which means this options trading strategy can lead to a higher potential for profit.

Options Investing Strategies: Triple EMA Crossover

By increasing the number of moving averages, a trader can create an indicator with increased accuracy. Increased accuracy can both increase potential for profit and reduce risk of loss in the options trading market.

A triple EMA crossover reduces false signals and increases the ability to indicate market trends. By increasing the amount of MAs in a single calculation, the strength of the trend is able to be recognized, as well as the reversal of that trend.

How to Use Crossovers as an Options Trading Strategy

Calculating crossovers is difficult; especially if you decide to use a double or triple EMA crossover. It can be extremely time consuming and risky without the help of an experienced strategist. By using a crossover strategy you build yourself, you could be risking your entire trade on your ability to calculate the crossover correctly.

Figuring out crossover strategy can be intimidating if you’re just getting into the options trading market. Even experienced options traders have come to Chuck Hughes searching for successful moving average crossover strategies. If you’re ready start trading options using an EMA crossover strategy, call Chuck Hughes now at (866) 661-5664 or Get More Information about Chuck Hughes’ exclusive options trading strategies.

Chuck Hughes’ Options Trading Market Experience

Chuck Hughes has been a successful options trader since 1986. He began trading with only $4,600. What started out as a hobby transformed into a multi-million dollar career. Within his first two years of trading options he profited over $460,000. Check out Chuck Hughes’ options trading profits.

Chuck has won ​10 ​ Trading Championships- that’s more than anybody else in champion trading history. Chuck Hughes is experienced in trading options and in using complex options trading strategies.

Chuck Hughes personally trades options and provides professional trading strategy services. Using Chuck Hughes’ options investing strategies and trading recommendations, your potential for profit within the options trading system can be increased and your risk for loss reduced.

Why Use Chuck Hughes as Your EMA Crossover Trading Strategy?

Chuck Hughes uses an intricate EMA crossover strategy to calculate buying and selling points.

One of Chuck’s exponential moving average crossover strategies utilizes a 50 Day EMA and a 100 Day EMA. This means a trader should purchase a stock when it’s 50 Day EMA crosses above the 100 Day EMA. On the other hand, an investor should sell a stock either when it’s 50 Day EMA crosses below the 100 Day EMA, or when the stock price declines 15% or more after the initial purchase of the asset.

By using Chuck Hughes’ EMA crossover strategies, traders can count on dependable strategic investments instead of trades based upon emotion.

As part of Chuck’s investment trading strategy, you’ll never have to guess when a stock price has bottomed out in order to make a purchasing decision. Chuck’s exponential moving average crossover rules protect investors and minimize losses should a stock price decline significantly.

In fact, using Chuck Hughes as your options trading service is even easier than that- you don’t even have to figure out strategy. Chuck Hughes will give you trade recommendations. This means you can forego all of the stress and hassle of picking out successful trades and use Chuck’s trade recommendations. He does the work for you!

Using Chuck Hughes as your options trading service can increase your chances of success and reduce your risk of loss in the options trading market. If you’re ready to learn options investing strategies from one of the best, call now at (866) 661-5664 or click below to learn more about Chuck Hughes’ exclusive options trading strategies.
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The “Double EMA” trading strategy

Пересечение двух скользящих средних часто используют в составе комбинированных торговых стратегий — как сигнал для поиска точек входа на младшем таймфрейме, для открытия сделки после подтверждения от других индикаторов, как самостоятельную торговую систему (редко).

Чтобы не сидеть у монитора, ожидая, когда же мувинги пересекутся, удобно пользоваться специальным инструментом — индикатором пересечения двух МА с алертом. Он подаст звуковой сигнал в нужное время, и вы не пропустите момент входа в рынок. Разберемся, как настроить и использовать в работе такие инструменты.

Индикатор MA Signal

Простой индикатор MA Signal рисует на графике валютной пары стрелки и подает звуковой сигнал после закрытия первой свечи после пересечения скользящих средних. В настройках можно выбрать период, сдвиг, цены для построения и метод МА, а также настроить цвета. Если вам нужен звуковой сигнал по пересечению текущей цены и средней, укажите период первого мувинга 1.

Так выглядит график валютной пары с установленным индикатором (период средних — 7 и 14, платформа брокера Alpari MT-4)

Красными стрелками отмечены свечи, которые закрылись после пересечения быстрой средней медленной сверху вниз (синяя МА с периодом 7 пересекает красную МА с периодом 14 сверху вниз). Это сигнал на продажу валютной пары.

Синими стрелками отмечены свечи, которые закрылись после пересечения медленного мувинга быстрым (МА 7 пересекает МА 14) снизу вверх — сигнал на покупку.
Настройки индикатора пересечения двух МА с алертом выглядят так.

Во вкладке «Цвета» можно настроить цвет линий и стрелок.

Индикатор пересечения двух МА с алертом Double EMA crossover

Принцип работы этого индикатора похож на алгоритм предыдущего. Отличие заключается в том, что на самом графике валютной пары показываются только стрелки без самих скользящих средних. Помимо алерта на пересечении 2-х МА, индикатор отправляет сообщение на e-mail, если это указать в настройках.

На графике результаты работы индикатора выглядят в виде стрелок, указывающих на сигнальную свечу. Таковой считается та, которая закрылась после пересечения мувингов.

Индикатор 3 MA cross with alert

Этот индикатор пересечения двух МА с алертом отличается от двух предыдущих. Он позволяет следить одновременно за тремя мувингами — быстрым, средним и медленным. По умолчанию индикатор показывает на графике 3 средних с периодами 10, 20 и 40.

Если быстрая и средняя средние пересекаются, над сигнальной свечой появится ромб. Если пересекутся быстрая и медленная МА, вы увидите стрелку. Цвет фигур зависит от направления пересечения. Красные стрелки и ромбы означают сигнал на продажу, синие — на покупку. Иногда три средних пересекаются одновременно, как в примере ниже. Над сигнальной свечой в таком случае появится и ромб, и стрелка одновременно.

Настройки этого индикатора пересечения двух МА с алертом позволяют изменить тип, метод и период средних, выбрать цвета и толщину линий и стрелок, отключить или подключить звуковые сигналы и оповещения о пересечении на электронную почту.

Как и с чем использовать индикаторы в торговле

Скользящие средние с алертом используют точно так же, как и стандартный индикатор без звукового оповещения. Не стоит входить в рынок только по пересечению двух или трех мувингов. Используйте другие инструменты, подтверждающие сигнал на открытие сделки.

Лучше всего использовать индикатор пересечения двух МА в стратегиях торговли, предполагающих поиск точек входа на младших таймфреймах после анализа ситуации на старших. Разберем на примере.

На дневном графике валютной пары евро-доллар сформировался равноудаленный канал. В настоящий момент цена находится у его нижней границы.

По правилам торговли на отскок необходимо дождаться, пока цена сформирует новую свечу, которая закроется внутри канала. Если перейти на младшие таймфреймы, войти в рынок можно раньше. Откроем период H1.

Здесь пара продолжает движение в нисходящем тренде, однако он уже не такой сильный как раньше. Внизу цена сформировала уровень поддержки (желтая линия). Вверху в роли сопротивления выступают скользящие средние. В рынок пока входить рано, необходимо наблюдать за ситуацией.

Если цена не пробьет уровень поддержки вниз, у нее есть шанс развернуться. Когда три скользящие средние пересекутся вверх, можно открывать сделку на покупку или же перейти еще на таймфрейм ниже, чтобы уточнить вход.

Подтверждать сигнал по пересечению двух средних можно с помощью других индикаторов. Для этой роли отлично подходят осцилляторы: стохастик, RSI, CCI, OsMA, MACD.

Разберем ситуацию на дневном графике пары евро-доллар. Скользящие средние с периодами 7 и 21 пересеклись на продажу, о чем предупреждает красная стрелка под свечой. Индикатор MACD в это время находится в отрицательной зоне. Гистограмма удаляется от нулевой отметки, а значит нисходящая тенденция усиливается. Вход в рынок с продажами подтвержден.

Если вы используете стохастик, подтверждающим сигналом при пересечениях средних будет выход линии индикатора из зоны перекупленности при продажах и выход из области перепроданности при покупках. Границы этих зон можно оставить по умолчанию (уровни 20 и 80), а можно изменить на 30 и 70. Во втором случае торговая стратегия покажет больше сигналов.

Преимущества и недостатки

Алерт на пересечении 2-х МА полезен, если ваша торговля напрямую завязана на скользящих средних. Вам не придется сидеть у монитора и постоянно открывать терминал, чтобы узнать текущую ситуацию. Индикатор подаст сигнал, когда мувинги пересекутся. Это главное преимущество инструментов с алертом в отличие от стандартного Moving Average, встроенного в терминал МТ4.

Из недостатков можно отметить запаздывание сигналов. Этим страдают любые трендовые инструменты. Часто мувинги пересекаются в тот момент, когда тренд уже набрал обороты, однако этот недостаток присущ любой модификации индикатора «Скользящие средние». Во время боковой тенденции инструмент не работает.

Все индикаторы, описанные в статье, вы можете скачать на нашем сайте по ссылке выше.

Лучше всего для торговли подойдут брокеры – Alpari, RoboForex или Forex4You.

Double Exponential Moving Averages Explained

Traders have relied on moving averages to help pinpoint high probability trading entry points and profitable exits for many years. A well-known problem with moving averages, however, is the serious lag that is present in most types of moving averages. The double exponential moving average, or DEMA, provides a solution by calculating a faster averaging methodology. (See also: Moving Averages.)

History of the Double Exponential Moving Average

In technical analysis, the term moving average refers to an average of price for a particular trading instrument over a specified time period. For example, a 10-day moving average calculates the average price of a specific instrument over the past 10 days, a 200-day moving average calculates the average price of the last 200 days and so on. Each day, the look-back period advances to base calculations on the last X number of days. A moving average appears as a smooth, curving line that provides a visual representation of the longer-term trend of an instrument. Faster moving averages, with shorter look-back periods, are choppier; slower moving averages, with longer look-back periods, are smoother. Because a moving average is a backward-looking indicator, it is described as lagging.

The double exponential moving average (DEMA), shown in Figure 1, was developed by Patrick Mulloy in an attempt to reduce the amount of lag time found in traditional moving averages. It was first introduced in the February 1994 issue of the magazine Technical Analysis of Stocks & Commodities in Mulloy’s article “Smoothing Data with Faster Moving Averages.” (For more, see: Technical Analysis Tutorial.)

Figure 1: This one-minute chart of the e-mini Russell 2000 futures contract shows two different double exponential moving averages; a 55-period appears in blue, a 21-period in pink.

Calculating a DEMA

As Mulloy explains in his original article, “the DEMA is not just a double EMA with twice the lag time of a single EMA, but is a composite implementation of single and double EMAs producing another EMA with less lag than either of the original two.” In other words, the DEMA is not simply two EMAs combined, or a moving average of a moving average, but it is a calculation of both single and double EMAs.

Nearly all trading analysis platforms have the DEMA included as an indicator that can be added to charts. Therefore, traders can use the DEMA without knowing the math behind the calculations and without having to write or input any code.

Comparing the DEMA With Traditional Moving Averages

Moving averages are one of the most popular methods of technical analysis. Many traders use them to spot trend reversals, especially in a moving average crossover, where two moving averages of different lengths are placed on a chart. Points where the moving averages cross can signify buying or selling opportunities.

The DEMA can help traders spot reversals sooner because it is faster to respond to changes in market activity. Figure 2 shows an example of the e-mini Russell 2000 futures contract. This one-minute chart has four moving averages applied:

  • 21-period DEMA (pink)
  • 55-period DEMA (dark blue)
  • 21-period MA (light blue)
  • 55-period MA (light green)

Figure 2: This one-minute chart of the e-mini Russell 2000 futures contract illustrates the faster response time of the DEMA when used in a crossover. Notice how the DEMA crossover in both instances appears significantly sooner than the MA crossovers.

The first DEMA crossover appears at 12:29, and the next bar opens at a price of $663.20. The MA crossover, on the other hand, forms at 12:34, and the next bar’s opening price is at $660.50. In the next set of crossovers, the DEMA crossover appears at 1:33, and the next bar opens at $658. The MA, in contrast, forms at 1:43, with the next bar opening at $662.90. In each instance, the DEMA crossover provides an advantage in getting into the trend earlier than the MA crossover. (See also: Moving Averages Tutorial.)

Trading With a DEMA

The above moving average crossover examples illustrate the effectiveness of using the faster DEMA. In addition to using the DEMA as a standalone indicator or in a crossover setup, the DEMA can be used in a variety of indicators in which the logic is based on a moving average. Technical analysis tools such as moving average convergence divergence (MACD) and triple exponential moving average (TRIX) are based on moving average types and can be modified to incorporate a DEMA in place of other more traditional types of moving averages.

Substituting the DEMA can help traders spot different buying and selling opportunities that are ahead of those provided by the MAs or EMAs traditionally used in these indicators. Of course, getting into a trend sooner rather than later typically leads to higher profits. Figure 2 illustrates this principle – if we were to use the crossovers as buy and sell signals, we would enter the trades significantly earlier when using the DEMA crossover as opposed to the MA crossover. (For more, see: How to Use a Moving Average to Buy Stocks.)

Bottom Line

Traders and investors have long used moving averages in their market analysis. Moving averages are a widely used technical analysis tool that provides a means of quickly viewing and interpreting the longer-term trend of a given trading instrument. Since moving averages by their very nature are lagging indicators, it is helpful to tweak the moving average in order to calculate a quicker, more responsive indicator. The DEMA provides traders and investors a view of the longer-term trend, with the added advantage of being a faster moving average with less lag time. (For additional reading, check out: Moving Average MACD Combo and Simple vs. Exponential Moving Averages.)

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