Best Moving Average for 15-Minute Chart: Mastering Day Trading

by Matt on September 21, 2023

At (C), QQQ bobs and weaves through an afternoon session in a choppy and volatile pattern, with price whipping back and forth in approximate one-point range. The respective SMAs shows similar whipsaws, with multiple crossovers but little alignment between moving averages. These which ema is best for 15 min chart high noise levels warn the observant day trader to pull up stakes and move on to another security. Day traders are investors who open and close all their positions in a single day. They prefer to always start afresh the next day instead of bringing trades into the next day.

As a trader, you should wait and make use of the moment where the price retests the 20 EMA line. One of the most critical matters that every trader must have is a trading strategy. Without a proper plan, trading might be tougher than it should be and the results can go unexpectedly.

Which indicator is best for 15 min chart?

Prior to making any decisions, carefully assess your financial situation and determine whether you can afford the potential risk of losing your money. The zero-lag exponential moving average (ZLEMA) is a type of exponential moving average that seeks to reduce the inherent lag seen in a typical moving average. It was designed to track the price more closely and give a clearer view of the trend with no lags. In the 2-period ADX Trend Trading Strategy, we are using a 2-period ADX to catch low risk entries in a trending market.

  • An EMA crossover occurs when two or more different EMA lines cross each other.
  • If a short-term trend does not appear to be gaining any support from the longer-term averages, it may be a sign the longer-term trend is tiring out.
  • As with other indicators, an EMA is only one tool and is capable of false-positive alerts.
  • By using such a short look-back period for the ADX indicator, it becomes extremely sensitive.

The Exponential Moving Average is a popular technical indicator in the financial industry. Traders in those markets employ the Exponential Moving Average to assist them in identifying trends in price fluctuations. Day traders frequently use multiple EMA periods to create a good setup for plotting their charts. The five, ten, twenty, and fifty-day Exponential Moving Averages are the most commonly used for identifying short-term trends. In conclusion, the best EMA to use for 15-minute charts in forex trading depends on several factors.

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A common trading strategy utilizing EMAs is to trade based on the position of a shorter-term EMA in relation to a longer-term EMA. For example, traders are bullish when the 20 EMA crosses above the 50 EMA or remains above the 50 EMA, and only turn bearish if the 20 EMA falls below the 50 EMA. 15 Minute Chart There are only 4 candles per hour to monitor, and plenty of time between each finished period is more relaxing than having updates every minute. The 15 minute time frame does exceptionally well for day traders monitoring multiple stocks or other assets at once. You should consider using moving averages with other technical analysis tools on your 15-minute chart to improve your trading methods.

A “pending order” in trading is an instruction to execute a trade once the price reaches a specific pre-defined level. It’s like setting up a trade in advance, and the order is only activated when the market reaches the price you’ve specified. Combining MAs with volume-based indicators and oscillators is a good strategy. Personally, we believe that MAs should be combined with stochastics, the Relative Strength Index (RSI), and accumulation/distribution. The WMA eliminates lag by discounting the weight of an asset’s “ancient” prices.

How To Choose Best EMA Setting For Trading

However, you should use a higher number of bars for the calculation to minimize noise and false signals. You just need to compare the last moving average with the present. When the price is traded above averages whose slopes oppose, it conflicts and indicates a long-side play while a falling slope denotes a high-risk condition. This is why this indicator reacts faster to the moment of price and gives a more reliable trend representation. The oldest form of analysis, EMA is largely used as an effective trading indicator.

Identify entry and exit levels

It is a technical indicator tool that tracks the price movement of an asset over time. It is also sometimes referred to as the Exponentially Weighted Moving Average (EWMA). It is important to note that this is slightly different than a Simple Moving Average (SMA). The benefits of using an EMA compared to a simple moving average is that you are likely to receive a signal that is more in tune with current price action. The developer of the RSI, J. Welles Wilder Jr. recommends using the 14-period RSI.

EMA Trading Strategy for 15-Minute Chart

In a 15-minute chart, for example, you could have a 14-day exponential moving average and a 5-day EMA. While simple is good, the use of two additional indicators will often address the lagging and volatility concerns that exist with a pair of EMA lines. The most popular additions are a momentum oscillator for the lagging issue and a volatility-based indicator like the Average True Range “ATR”. False-positive signals will occur, but practice time on a demo system will bring confidence to your use of these TA tools. Another strategy that has been very important to me is to combine two moving averages in the same chart.

It needs to be used in conjunction with other indicators for the purpose of trading. We’re going to be depending on their crossover points in order to execute our positions. The two EMAs we’re going to be using are the 8 EMA and the 20 EMA. Using these methods with a 15-minute chart can help you make sure that you’re using the EMA in the most effective way to make trades at the right times. Using EMA is considered to be more profitable because it sticks closer to the price compared to SMA. This means it can show a more accurate bouncing line on the chart.

The 10-day Exponential Moving Average over an hourly chart is the best EMA strategy for day traders. It provides the perfect range for a day trader to perfectly analyze the chart in order to predict future price movements. Yet, it is important to note that EMA should never be completely relied on as nothing or no one can 100% guarantee something to go as planned in the future. This is where good risk management comes to ensure your account’s safety against unpredictable price movements. Increases in movement offer buying opportunities for day traders, while decreases in movement signal for the opportunity to sell.

Is 15 minute time frame good for day trading?

As mentioned, the EMA is a moving average that gives more weight to recent data. The weighting is based on a mathematical calculation, so the EMA responds more quickly to recent changes in the data. Hey ah, I’m just a little curious about the trading tips using cross MA mentioned in the article. The idea is to trade on a return to the previous trend after a retracement, which happens after the EMA crossover. You might still be wondering why we shouldn’t open a trade once the 10 EMA crosses the 25 EMA. Instead, we place a pending order (sell stop or buy stop) after a cross between the 10 EMA and 50 EMA.

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