LONG TERM MORE THAN 3 MONTH WITH



USING APPLICATION THE SHIFT AND THE PERIOD IN
SMA FOR EMA



 



Continuing for writing for the other parts from Simple Moving
Average (SMA), most the traders use like Exponential Moving Average (EMA). This
indicator is very simple, and we can use for the Shift and the Period like been
explained in the before Article (Simple Moving Average (SMA), for instance for
trading monthly, with Pips (Lot) equals 2, the best period we can use it is
12), so only one way for looking more the Period and the Shift in EMA?



Ussualy, the general Formula for EMA as below



EMA = Pr + {C *
(Price Now- Pr)}                                                       



where,



EMA = Exponential
Moving Average



Pr = The Previous
Period Exponential Moving Average



C = The Smoothing Constant,
where is derived from the time period selected by individual, and ussualy
following with the C = 2/n+1, where n is the period selected.



 



Furthermore, for
explaining how to look for “Pr” depends on the assumption what we make, take a
look for the example below.



 



Example 1 :



We make for Pr = 50,
so with the monthly Trading. Based on the before Article, for one month
Trading, we can choose n=12, so that we can get for C = 0.153846153, take for C
= 0.15. Assuming too, we trade with currency Euro-Usd, and assume too, we see
for the Price Now is 1.3000, so for the EMA is 42.695, and we can make it as
42.   



 



Choosing the Value
of Pr is very difficult, every trader has the own decision when have to choose
the Value of Pr, different Value of Pr will have the effect different of the
chart for EMA. But the problem is can we use The Value of Pr by taking The
Period ?   



EMA = Pr + {C *
(Price Now- Pr)}                                                      



 



See again the General Formula as
mentioned above, if we assume that The Value of Pr will be the same like The
Period, the General Formula above will become :



EMA = Pr + {C *
(Price Now- Pr)}



Because with
assuming that The Value of Pr will be the same with The Period, it means that
Pr=n, and we can get :



EMA = n + {C *
(Price Now- n)}



where,



EMA = Exponential
Moving Average



n = The Period
Exponential Moving Average



C = The Smoothing Constant,
where is derived from the time period selected by individual, and ussualy
following with the C = 2/n+1, where n is the period selected.



 



Example 2 :



We make so with the
monthly Trading just like in example 1. Based on the before Article, for one
month Trading, we can choose n=12, so that we can get for C = 0.153846153, take
for C = 0.15. Assuming too, we trade with currency Euro-Usd, and assume too, we
see for the Price Now is 1.3000, so for the EMA is 10.395, and we can make it
as 10.  



 



Based on Example 1
and Example 2, both of them will be different with The Value of EMA, so it will
have the different in the Chart for EMA(will be explained more in the last),
and for choosing where is the best one for using in EMA, it depends on 2 types
like : 



1.   
The Assumption We Want to Make for The Value of Pr



2.   
The Type of Our Trading, Monthly Trading, Daily
Trading, Hourly Trading (can be like 5 Minutes, 15 Minutes,…, 4 Hour)



  



Now how to use in Meta,
see again in Example 1, and see again in my First Article in part a. Using the
n=12, for The Period and The Shift and then Choose Pr=50, with the Price
1.30000, now see the picture about the real of Trading, using the MT 4 DF MARKET, with
Euro-Usd, here the Step :



1.   
Choose The Indicator Moving Average



2.   
Choose The Exponential



3.   
Fill The Period and The Shoft, with n=12



4.   
Fill the Apply For, I prefer choosing one for Close
(Blue Line), and  one for Low (Red Line),
and the last



5.   
Choose The Time Frame MN      



Note : We can get
the EMA is 42



 

                                                   PICTURE 1







 



So, From the picture above, we can know that with using Exponential moving
Average (EMA) and enjoying it the long term, more effective using  EMA, and we can know from the picture it came from
2011 until now with using this data from part a, and Example 1 above the
Application of the Simple Moving Average.



The value of 42, it means that The Exponential Moving Average will be in
the as long as 42 days, or in other word, can be more one month till now



Next week, we will see the reason why choose the price 1.30000, wait for
the next writing


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