How to use moving averages, SMA, EMA to trade cryptocurrency
- Technical analysis (TA) is nothing new in the world of trading and investing. From traditional portfolios to cryptocurrencies like Bitcoin and Ethereum, the use of TA indicators has a simple goal: use existing data to make more informed decisions that will likely lead to desired outcomes. As markets grow increasingly more complicated, the last decades have produced hundreds of different types of TA indicators, but few have seen the popularity and consistent usage of moving averages (MA).
- https://academy.binance.com/en/articles/moving-averages-explained
EMA vs SMA
An EMA is a moving average with a different distribution curve that places more weight on recent trading periods.
As a result, EMAs react faster to sudden changes in price and are especially useful for trading breakouts.
Trend identification using EMA can be more reliable than with SMA as it is more sensitive to recent price changes, although high sensitivity to recent price changes can also result in more false trade signals.
- SMA and EMA are useful analytical tools to follow market trends and can indicate market entry or exit points. SMA stands for simple moving average, and EMA stands for exponential moving average.
- https://medium.com/neuryx/quickstart-guide-to-sma-and-ema-for-crypto-trading-51dc19afdb02#:~:text=SMA%20stands%20for%20simple%20moving,bitcoin%20price%20over%2020%20days).
