- or simply (most recent first), a very good detailed explanation with examples https://www.investopedia.com/terms/e/ema.asp
- Moving Average Convergence Divergence, details https://www.investopedia.com/terms/m/macd.asp
I am using (9,50,100)
EMA9, EMA50 and EMA100 simply means weighted moving averages over 9, 50 and 100 periods respectively with most recent prices having more weight-age. Notice EMA9 kisses the price closely and changes direction quickly to indicating if price is going up or down. Comparison with EMA50 & EMA100 gives a good idea of how current price is doing as compared to price averaged over longer periods. Also note that shorter periods change direction more quickly as compared to longer periods.
and are good for day trading only. They must be used with other indicators if you want to be sure that a bull/bear trend will continue to hold. Other patterns like head and shoulder, inverted head and should, etc. can be used to confirm if its a strong trend.
(12,26,9) - Traditionally trading was done over 6 days so 12 days is two weeks, 26 days a month hence the parameters. These two form the line.
Formula for = MA(12) - MA(26)
9 is for signal line which is of the line over 9 periods.
It is important to note that is almost always used in conjunction with to avoid selling/buying too quickly. You will notice that line changes in direction up/down is directly proportional to .
So, lets calculate profit for this example
first bear cross (SELL) marked in red. average price (open+high+low+closed) / 4 = 11,441
first bull cross (BUY) marked in green. average price (open+high+low+closed) / 4 = 8,892
people call this profit (but i think its just avoiding loss since you didn't make money on top of what you spent) = 11,441 - 8892 = 2549
second bear cross (SELL), average price = 8336
second bull cross (BUY), average price = 7297
Profit = 1038
Grand Profit = 2549 + 1038 = 3587USD per BTC