Today we start a cycle of editions dedicated to day trading. To analyze the price movement on the chart, we will use the DEMA indicator.
So, go to the platform BitSeven at www.bitseven.com and select the “Leverage Trading” tab. We’ll open the price chart in a separate window for our convenience. Determine the daily timeframe. Select the “Indicators” button, and in the window that opens, we’ll select Double EMA indicator.
After all our actions on the price chart it will be superimposed line of Double EMA. It is time to explain our choice and our actions.
The choice of the daily timeframe is due to the lower noise on the price chart, the possibility of easier detection the graphic patterns for technical analysis. This timeframe teaches patience. A relatively small number of trading strategies for this time interval does not dissipate the attention of a novice trader.
The choice of Double EMA is due in turn to the fact that it has a smaller lag behind the price movement on the chart compared to other indicators based on moving averages.
The buy signal for us is the moment when the price on the chart crosses the indicator line from bottom to top. In this case, the indicator line will be a support level for us.
Accordingly, the crossing of the indicator line from top to bottom will be a sell signal for us. The indicator line is a resistance level.