WEBVTT 00:05.690 --> 00:11.330 OK the first technical analysis technique that I'm about to share with you in this course is the exponential 00:11.330 --> 00:12.680 moving average. 00:12.770 --> 00:18.020 This is a very powerful technique that can LPU instantly determine if a cryptocurrency will go up or 00:18.020 --> 00:19.970 down in the near future. 00:19.970 --> 00:25.790 Sounds interesting right in terms of definition a moving average is a technical indicator that displays 00:25.790 --> 00:29.290 the price of a security over a set period of time. 00:29.420 --> 00:33.490 It helps move the price data to form a trend following indicator. 00:33.500 --> 00:35.980 There are different types of moving averages. 00:36.020 --> 00:42.800 The two basic and commonly used moving averages are the simple moving average or SMK and the exponential 00:42.800 --> 00:49.140 moving average or EMJ the exponential moving averages similar to a simple moving average. 00:49.280 --> 00:54.740 The only difference is that this type of moving average reacts much faster to recent price changes than 00:54.740 --> 00:56.550 a simple moving average. 00:56.900 --> 01:00.230 That is to say it focuses more on recent price action. 01:00.320 --> 01:04.730 So can help us a lot better in predicting how the price will move in the future. 01:04.790 --> 01:10.990 I think it works better in a volatile market like the cryptocurrency market as you can see the crypto 01:10.990 --> 01:12.780 market is very volatile. 01:12.820 --> 01:15.700 Prices fluctuate wildly over time. 01:15.820 --> 01:21.490 So for a more precise analysis we need to give more weight to recent data and that's why for trading 01:21.490 --> 01:27.590 cryptocurrency we'll use the exponential moving averages instead of simple moving averages. 01:30.540 --> 01:33.710 Here's what the exponential moving average looks like. 01:33.720 --> 01:39.060 As you can see on the screen the blue line is the nine day exponential moving average. 01:39.090 --> 01:45.280 The red line is the 20 day EMJ and the orange line is the EMJ 50. 01:45.290 --> 01:48.810 So how can we use these lines to spot market trends. 01:51.540 --> 01:55.160 There are two ways that you can use exponential moving averages. 01:55.170 --> 02:02.340 The first one is to use the moving average crossover strategy to determine market trends how this strategy 02:02.340 --> 02:03.370 works is simple. 02:03.450 --> 02:11.130 We simply use to exponential moving averages EMJ 9 and EMJ 20 and wait for the faster line to cross 02:11.130 --> 02:14.580 above or below the slower line. 02:14.580 --> 02:20.650 The faster line is the nine day EMJ and the slower line is the 20 day EMJ. 02:20.670 --> 02:22.720 So here's an up trend signal. 02:22.800 --> 02:29.260 When the nine day EMJ crosses above the 20 day EMJ and both lines are sloping upward This means there's 02:29.270 --> 02:30.220 an up trend. 02:30.360 --> 02:33.890 Chances are your coin's price will go up in the near future. 02:33.900 --> 02:39.660 So in this case you can follow the trend in place of buy order when the price increases you'll make 02:39.660 --> 02:40.430 a profit. 02:40.710 --> 02:41.510 Simple right. 02:42.450 --> 02:48.480 And when the EMJ 9 crosses below that EMJ 20 and both lines start sloping downward. 02:48.480 --> 02:50.510 This is a downtrend signal. 02:50.850 --> 02:55.830 Chances are your Goines price will go down in the near future and you'll want to sell your coin before 02:55.830 --> 02:58.360 the price drops further to protect your money. 02:59.120 --> 03:05.550 And when that trend reverses or when the EMJ 9 crosses above the EMJ 20 and both lines start sloping 03:05.610 --> 03:11.190 upward again will consider making another investment because we know that the price will go back up 03:11.190 --> 03:12.090 soon. 03:12.180 --> 03:20.910 So we simply buy low and sell high and we'll keep doing this again and again and again and you can make 03:20.910 --> 03:26.110 a lot of money by just buying low and then selling high OK. 03:26.110 --> 03:33.160 The second strategy is to use a 50 day exponential moving average as a dynamic sport or resistance. 03:33.160 --> 03:38.980 Here's what you need to take into account when prices are above the EMJ 50 this moving average can act 03:38.980 --> 03:41.830 as a support that helps push the price up. 03:41.860 --> 03:47.890 So this means when prices cross above the 50 day EMJ the uptrend signal will be stronger and there will 03:47.890 --> 03:51.070 be a high chance that the price will go up soon. 03:51.320 --> 03:57.320 And when prices are below that EMJ 50 moving average can act as a resistance that prevents the price 03:57.320 --> 03:59.050 from rising up. 03:59.060 --> 04:04.910 So when you see prices crossed below that EMJ 50 This means the downtrend signal is stronger and you 04:04.910 --> 04:10.820 can be confident that the downtrend will happen very soon what you can do now is to get out of the market 04:10.820 --> 04:13.400 as soon as possible to protect your money. 04:14.350 --> 04:17.440 If you still have no idea about how these strategies work. 04:17.440 --> 04:18.400 Don't worry. 04:18.490 --> 04:21.610 We'll dive into a lot of examples in the next lecture 04:24.340 --> 04:25.060 OK. 04:25.060 --> 04:30.130 Now let's talk about what chart time frames you should use to implement this strategy. 04:30.160 --> 04:36.310 From my own experience the best thing about this strategy is that it works on any chart you use. 04:36.310 --> 04:41.440 If you're a long term investor in your investment horizon is from several weeks to several months or 04:41.440 --> 04:47.710 even one to two years you can use daily charts and when you're a long term investor your risk will be 04:47.710 --> 04:48.680 much lower. 04:49.500 --> 04:54.900 If you're a medium term investor in your investment horizon is from several days to several weeks you 04:54.900 --> 04:57.240 can use both hourly and daily charts. 04:57.360 --> 05:02.910 But remember there's no low risk option when it comes to cryptocurrency trading as the market is very 05:02.910 --> 05:03.660 volatile. 05:04.630 --> 05:09.850 And if you're a short term trader and you want to continuously buy and sell crypto currencies you can 05:09.850 --> 05:12.660 use 15 minute and hourly charts. 05:12.880 --> 05:18.460 But I don't recommend you day trading cryptocurrency because the market price fluctuates wildly over 05:18.460 --> 05:19.150 time. 05:19.240 --> 05:21.480 So you can lose your money very quickly. 05:22.340 --> 05:27.950 If you want to be a highly profitable cryptocurrency investor what I recommend is that you focus 80 05:27.950 --> 05:35.420 percent of your time money and energy into long term investments and 20 percent in mid-term investments 05:36.260 --> 05:42.020 and make sure you stay away from day trading unless you master all technical trading techniques and 05:42.020 --> 05:43.620 you can afford to lose your money. 05:44.550 --> 05:50.730 Long term investments can be some standard crypto currencies like Bitcoin a theory or Ripple and some 05:50.730 --> 05:56.910 new promising coins mid-term investments can be other coins that you find that their value will potentially 05:56.970 --> 05:58.360 increase in the future. 05:59.360 --> 06:05.390 And for the sake of your money safety make sure you stay away from trading pump and dump coins or coins 06:05.390 --> 06:10.880 that increase 50 percent or even 500 percent in value in the last 24 hours. 06:12.370 --> 06:17.900 OK before we dive into a lot of examples let's learn how to set up the indicator in trading view and 06:17.900 --> 06:20.070 other trading software. 06:20.090 --> 06:24.980 First of all you'll need to add three exponential moving averages in trading view. 06:24.980 --> 06:29.500 You can click indicators then type moving average here. 06:30.410 --> 06:34.650 As you can see on the screen we have moving average exponential here. 06:34.760 --> 06:40.090 Simply click on it three times to add three EMJ line. 06:40.140 --> 06:46.820 The next thing we'll do is to change the EMJ periods to 9 20 and 50 respectively. 06:47.250 --> 06:51.580 Now click on the gear button will change this line's color to blue. 06:51.690 --> 06:59.100 You can use any color you like and then click on the input tab will change the first EMH period to 9 07:00.250 --> 07:02.700 will do the same for the other lines. 07:02.700 --> 07:06.540 Now click on the gear button again will change the length to 20 07:09.810 --> 07:16.760 and then click on the style tab and change the lines color to red will do the same for the third EMJ. 07:16.780 --> 07:25.040 Now click on the gear button again and change the lines color to orange and change the EMJ period to 07:25.040 --> 07:26.950 50. 07:26.950 --> 07:29.900 Now we have three different exponential moving averages. 07:30.070 --> 07:38.500 The blue line is the 9 day EMJ the red line is the EMJ 20 and the orange line is the EMEA 50 and make 07:38.500 --> 07:43.670 sure you don't skip the next video because we're going to dive into a lot of examples.