What are the selection methods of the EMA period?

There are many kinds of cycle options for EMA systems, which are used by investors from 3rd to hundreds of days. But in the end should be a few days of the average line to judge the reference is more effective, this problem has plagued most investors. Because most of the investors tend to short-term speculation, the securities company's EMA set, usually short-term or short-term average, such as 5th, 10th, 20th or 5th, 10th, 30th, very little use can represent the short and medium length three trend of the average. In fact, the choice of moving averages should represent a short and medium length of three trends rather than focusing on one trend and ignoring other trends, which is unwise, so consider the following trends:

Short-term trend: usually refers to the trend of stock price fluctuation under one months, because the 5th-line moving average represents a one-week fluctuation. The 10th line represents the half-moon line.　　So we often use them to represent short-term trends, and short-term averages tend to fluctuate significantly and are overly sensitive. Medium-term trend: refers to one months or more, the price fluctuation trend below half a year. Commonly used 20th line, 40 day line, 60 day line. This is because the 20th line represents a one-month stock price volatility trend. The 40 day line represents a two-month stock price fluctuation trend. The 60 day line represents a three-month trend of volatility, which is exactly one quarter, and therefore called the quarterly line, and is often used by investors. The medium-term moving average movement is not too sensitive, and has a calm side, so most often used by investors.

Long-term trend: refers to the trend of stock price fluctuation over half a year. The more commonly used is the 120 day line and the 240 day line. The 120 day line represents half a year of fluctuation direction, also called half a year line. 240 The daily average line represents the direction of the wave in exactly one year, also called the year line. In general, the long-term average trend is too stable and inflexible.

In order to show the average cost of these three trends in the long, short and medium term, we should choose these trends at the same time, but not because of personal habits or preferences. It is not possible to do analytical work without observing the changes of several trends at the same time.

Many investors set up some of the less common EMA cycles, such as 7th, 9th, 13th, 27th and so on, the purpose is to worry about the dealer deliberately cheat line. This is completely unnecessary, in fact, as long as the short-term fluctuations, at any time there is the possibility of the main force deliberately. This is because the short-term moving average is the easiest to manipulate, and the medium-and long-term trend is difficult to deliberately underline, if all investors refer to the EMA period is 240 average day line, even if the main knowledge of this, he can do cheat line? This is the main reason to consider three trends simultaneously. Therefore, there is no need for us to deliberately set some infrequently used EMA cycles.

It is important to note that the closing price is the base point of the system of the EMA, because in the past, regardless of any technical indicators, including the record of the K-line, it is completely hand-recorded. So it is not easy to record the closing price of each stock, and to get the average price per day of the stock, you must have all the transaction records provided by the Exchange to calculate it. On the one hand, the data is too large, on the other hand the data hard-won, and the closing price is relatively easy to get, so the closing price as the basis for calculating the average line, over time accustomed to natural, has been used to today. In fact, the average cost of a day's share price is, of course, not the closing price. Using the closing price to calculate the short-term moving average, for example, the 5th moving average, the difference between the real average value is larger, so the shorter the period of the moving average is calculated by this method, the less the average cost can be represented. In contrast, the longer the period of this error is smaller, so the real meaning is the daily average price, rather than close, this factor is to use the EMA system investors must pay attention to.

What are the selection methods of the EMA period?