EMA over different time-frames

Beginner Questions
1

Hi BabyPip community,

I’ve been demo trading for about 2 months and need some pointers regarding a matter.

I’m interested in running an ema cross-over strategy designed for 1-hour candles on a 5 minute chart.

Let me elaborate:

I like to watch EMA 5 and 10 crossover on the 1 hour chart however I don’t like to wait for the entire hour to pass. I’d like the same EMA’s (1 hr equivalent) running on a 5 minute chart.

What I tried to do was run two EMA’s on the 5 minute chart but multiplying them by 12 (5mins x 12= 1 hour candle). So running a 60 minute fast ema (5 x12) to crossover a slow 120 ema (10x12). This in theory makes sense however when I compare the cross-overs on the 1 hour chart vs this setup on a 5 minute chart, I do not get the same result.

This is likely because of the exponential aspect of the moving average. Still, is there any way one can do this on the 5 minute chart? Maybe a different way of setting up the emas, different calculations, or perhaps some mt4 indicators?

Any help would be greatly appreciated.

Thanks,
Kasio

2

You won’t get MAs to look the same in different time frames, even if you account for the overall time period by multiplying.

You can have a short up move on a 5 minute chart that you would never see on a one hour candle, that closes down.

It’s not the exponential part either. It’s just the basic differences of price action in each given time frame.

I guess an appropriate question is how long does your average trade take to close?

You may be better off with a 15 minute chart.

3

Using an EMA for entry/exit signals on short time frames is not what an EMA is designed to do. An EMA’s function is to always lag the current price in order to keep a system from entering at every market fluctuation.

Really, EMA systems are designed to in effect ignore recent price ‘activity’ and focus on the longer trend. By applying such a system on short time frames, you are negating, or counteracting what the system is designed to do.

You could use an EMA as a directional filter, then use another method for getting in and out of trades.