Hii I have a question, I have a 10 EMA, 50 SMA y 100 SMA, what does it mean if they are all parallel? It means that there’s no trend or what? Can someone tell me?
Not necessarily no trend. If markets were flat long enough then all MA’s would not only be parallel but would also be flat and superimposed on each other on top of the price!
If the longer term MA is flat then that indicates there is no strong trend in place ( depending on what TF we are talking about) and that price is oscillating around it and the shorter MAs are reflecting the turning points. But if they are all moving up or down in the same direction and parallel then that would suggest a very stable, prolonged move in that direction.
But I would suggest this is going to be a very short term situation. The 10 EMA is far more reactive to a new price move than the longer 100 SMA. I am sure that is the reason you are using these.
I tend to use the 50ema and 200ema and as above the 50 is more reactive to shorter term direction and may help to identify possible shorter term retracements but the 200ema largely helps to support the longer term bias
Si use 9 and 21 ma and thats it…good for me
For 50 SMA:
Take 50 price observations, starting from the latest. Calculate their average - this will be the latest value of SMA.
Then make one step back, i.e. take 50 price observations where the latest observation is the first price that was before the latest one. Calculate its average - this will be the value of SMA before the latest.
Repeating this procedure (two steps back, calculating average, three steps back, calculating average…) you build SMA curve.
For 100 SMA you use 100 price observations instead of 50. For EMA you don’t calculate the average (i.e. (s1 + s2 + s3…sN) / N) you instead use a smoothing coefficient which is a bit difficult concept for newbies.
No, it doesn’t always mean that there is no trend. If there wouldn’t have been any trend, the market would have appeared flat and superimposed apart from just being parallel. As far as I know, it will be a short term situation only.
Yes, parallel FLAT MA’s means there is no trend.
If they are all parallel in one direction up or down it means a trend. Lower the ema the more short term it is