Account Info
Log Out
No matches yet
Operations too frequent. Please try again later.
Please check network settings and try again Refresh Refresh
History record delete
    Quotes All >
      News All >
        Log in to access Online Inquiry

        Basics of Technical Analysis

        Views 20882022.09.21

        What is the EMA?

        Key takeaways

        • EMA is short for Exponential Moving Average, which is a trend indicator that gives more weighting to recent price data.

        • A golden-cross signal occurs when a shorter-term EMA moves above a longer-term EMA. 

        Understanding EMA

        EMA refers to Exponential Moving Average, also known as the EXPMA indicator, which serves as a trend indicator. 

        If you intend to compare the relationship between a value and the average price, an MA would be sufficed. However, if you'd like to track the trend of the average price, an EMA would be suggested as it is more stable.

        Here's how the EMA indicator works: It uses the weighted arithmetic average of the closing price to predict the future price trends. Unlike other MAs, the EMA indicator gives more weight to recent prices. Therefore, an EMA is more sensitive to price changes as it puts a greater focus on recent data than on older data.

        How to use an EMA efficiently in trading 

        To put it simply, go long when the EMA rises; go long when the price rises near the 10-day moving average; go short when the EMA falls, and go short when the price falls near the 10-day moving average. When the EMA is flat, it signals that there is no obvious trend in the market and less focus may be put on this indicator.

        article image

        EMA indicators placed in the order from top to bottom are as follows: EMA5, EMA20, EMA50, EMA200, etc.

        An EMA can be used as a support level or a pressure level. A rising EMA acts as a support for the stock price, whereas a falling EMA acts as a pressure on the stock price.

        The use of EMAs is not limited to one instrument. Instead, you can set EMA lines for various trading instruments.

        The most commonly used long-term EMAs by traders are EMA50, EMA100, and EMA200, whereas the most commonly used short-term EMAs, are EMA12 and EMA26.

        A buy or golden-cross signal occurs when a shorter-term EMA moves above a longer-term EMA

        article image

        A sell signal can be identified when the shorter-term EMA line moves below the longer-term EMA line, which is also known as a death cross.

        article image

        Pros and cons of EMAs

        Pros: EMAs eliminate the drawbacks of giving equal weighting to all price changes, which is often the case for indicators like MAs. In a volatile market, EMAs are more reactive to price changes and thus have more strengths over simple MAs.

        Cons: EMAs are vulnerable to short-term extremes or false signals as it adapts quickly to price changes.

        How to set EMAs on moomoo

        • Step 1 Open the app and tap the stock chart you'd like to view

        • Step 2 Tap 1D to view the one-day chart

        • Step 3 Tap the EMA icon below

        • Step 4 Identify the default time frames for EMAs such as EMA10, EMA15, and EMA120

        • Step 5 Tap the settings icon on the upper right corner and tap Chart Settings> Indicators> EMA

        • Step 6 Set the time frames and colors for EMAs

        • Step 7 Go back to the stock chart to see if the EMA settings meet your demand

        article image

        Investment products and services are offered through Futu Inc., Member FINRA/SIPC. 

        This information is provided for informational and educational use only and is not investment advice, a recommendation, or endorsement of any particular investment or investment strategy. It is provided without respect to individual investor financial sophistication, financial situation, investing time horizon, or risk tolerance. This information and the information available within the moomoo app should not be relied upon as a primary basis for any investment decision. Investment decisions should be based on an individual's own goals, time horizon, and risk tolerance.  

        All investing involves risk, including the potential loss of principal. There is no guarantee or assurances that using any tools or data provided on the moomoo app or any investment strategy or approach discussed herein will result in investment success or reduce investment risk. 

        Images are for illustrative purposes only. Past performance does not guarantee future results. 

        Trade like a pro with moomoo

        Get free stock and start your professional trading today

        Terms and conditions apply right-arrow

        This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty as to its adequacy, completeness, accuracy or timeliness for any particular purpose of the above content.

        Moomoo is a financial information and trading app offered by Moomoo Technologies Inc.

        In the U.S., investment products and services available through the moomoo app are offered by Moomoo Financial Inc., a broker-dealer registered with the U.S. Securities and Exchange Commission (SEC) and a member of Financial Industry Regulatory Authority (FINRA)/Securities Investor Protection Corporation (SIPC).

        In Singapore, investment products and services available through the moomoo app are offered through Moomoo Financial Singapore Pte. Ltd. regulated by the Monetary Authority of Singapore (MAS). Moomoo Financial Singapore Pte. Ltd. is a Capital Markets Services Licence (License No. CMS101000) holder with the Exempt Financial Adviser Status. This advertisement has not been reviewed by the Monetary Authority of Singapore.

        In Australia, financial products and services available through the moomoo app are provided by Futu Securities (Australia) Ltd, an Australian Financial Services Licensee (AFSL No. 224663) regulated by the Australian Securities and Investment Commission (ASIC). Please read and understand our Financial Services Guide, Terms and Conditions, Privacy Policy and other disclosure documents which are available on our websites and Moomoo Technologies Inc., Moomoo Financial Inc., Moomoo Financial Singapore Pte. Ltd. and Futu Securities (Australia) Ltd are affiliated companies.