Bar/Line Chart on SMA/EMA
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  1. #1
    Join Date
    May 2016
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    1

    Question Bar/Line Chart on SMA/EMA

    Hello Experts.

    I am a day/swing trader and are new to the Forex world. Furthermore, I had a question in mind, Does the Bar/Line chart applicable to be use on SMA/EMA indicators? Or the SMA/EMA indicators are best paired with Candlestick patterns chart?

    Thank you in advanced and I hope to receive an answer towards my inquiry.

    High Regards,
    Xavier.

  2. #2
    Join Date
    Oct 2016
    Location
    Devon, UK
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    123
    I hope I'm not misunderstanding the question but here goes.

    SMA and EMA are calculated in slightly different ways but the difference is not generally large enough to make any difference when trading. But that assumes you use them simply to confirm trend, which is what both are really good for.
    e.g. if price is above 14SMA and 14EMA and both are rising, you can be pretty sure price is in a recent uptrend
    But you can't say that one type of MA gives a better indication of trend or trend strength than the other.

    The very small difference between the EMA and SMA can occasionally mean that one is giving what a trader might call an entry signal whereas the other is not. Or maybe hitting confluence with support or resistance whereas the other is not. However, I believe that using any MA in these ways and with such "precision" is abusing the MA so selecting one or the other won't resolve this.

    You can use any MA with either a line chart or a bar chart. Of course a bar chart with Open, High, Low and Close gives 4 times more information than a line chart, which is drawn from the Close only. A candlestick chart does even better. Occasionally its useful to confirm what you think you've seen on a bar/candlestick chart with a line chart but that's about it.

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