OK in this lecture We'll dive into a lot of examples.
So you can understand clearly how to use the exponential moving averages and how you can master this
technique in a very short period of time.
I know many traders and investors using moving averages but only a few of them master how to use it
properly.
That's why I want you to watch this video very closely and take note on everything you learn here.
OK.
Now let's take the first example to better understand how the moving average crossover strategy works.
As you can see on the screen the blue line is the nine day exponential moving average.
The red line is the 20 day EMEA and the orange line is that EMJ 50.
Now let's take a look at point A.
When the Blue Line or the EMJ nine crossed below the red line where the EMJ 20 and both lines started
sloping down.
This was a downtrend signal.
As you can see on the chart the price started dropping after the blue line crossed below the red line.
And now I want you to take note of this.
When the price drops below the Orange Line or the EMJ 50 We know that the downtrend signal is much stronger
and there's a high chance that the price will drop even further.
You see if you bought Tron or T-Rex at 750 Satoshi without a profitable strategy in mind you might have
lost half of your money in less than two months.
And when the EMJ nine crossed above the EMJ twenty both line started sloping up.
We have an uptrend signal here at Point B Similarly when the price broke up through that EMJ 50 and
it continued to stay above this line the uptrend signal was considered much stronger.
As you can see the price of this coin skyrocketed by over 200 percent in just one and a half months.
Now let's take another example.
As you can see on the chart the blue line crossed below the red line at point day.
And both lines were sloping down.
This tells us that this was a downtrend signal.
The price was going to go down and when the price dropped below the Orange Line we know that this was
a strong downtrend.
You see the price dropped by over 50 percent in about two months.
This strategy tells us exactly when we need to sell our investments to protect our money before the
price drops.
And if you can master this technique you can easily buy low when the trend reverses the EMEA 9 crossed
above the EMJ 20 a point B both line started sloping up.
We know that the trend had reversed in the uptrend signal got stronger when the price stayed above that
EMJ 50
OK.
Let's take another example.
As you can see the EMEA 9 crossed above that IIM-A 28 point day.
Both lines were sloping up.
The price was above the IIM-A 50.
So we know that there is a strong uptrend signal the trend reversed when the blue line crossed below
the red line at point B and the downtrend signal was stronger when the price dropped below the orange
line.
Now I want you to take a quick note here.
This strategy works perfectly well with the support and resistance strategy you've learned in the previous
module.
You see we have a support level here at around 900 Santoshi.
It helped push the price up many times and when the price broke down through the support level we might
guess that the trend would reverse when the price fell below the support level again.
We knew that there would be a downtrend and the price was going to drop further the old support level
now became a new resistance level that prevented the price from rising up again.
So in this case we could confirm that this was a downtrend.
The EMEA nine crossed above the EMJ 28 points C and both lines were sloping up.
This means that trended reversed and it was time to buy back the coin at a lower price.
And when the price goes up we'll make an easy profit.
OK.
Let's have a look at another example.
Looking at point A.
We have a downtrend signal here.
When the blue line cross below the red line and then the price fell below that EMJ nine EMJ 20 and DMA
50.
So we could consider this a strong downtrend.
The trend reversed when the blue line crossed above the red line a point B.
But this was a weak uptrend because the price failed to break up through the EMJ 50 as you can see on
the chart.
The price fell below the orange line many times.
So in cases like this from my trading experience I knew that the trend would likely reverse soon.
OK here's a quick note.
When you make a trade besides identifying the uptrend signal that you've learned.
I want you to keep three more important things in mind for the uptrend signaled to be stronger in this
case your risk will be lower.
First we want the blue line or the EMEA nine to be above the red line or the EMEA 20 and second.
These two lines should be above the EMEA 50 as well and the uptrend signal will be much stronger when
prices are above these moving averages.
As you can see on the chart the blue and red lines were below that EMEA 50 in cases like this that EMEA
50 can act as a dynamic resistance that can prevent the price from going up.
So to eliminate the circumstance we want the EMEA 9 and EMJ 20 to be above the EMEA 50.
It was even worse when the price dropped below these moving averages.
So we could guess that the price was going to drop soon.
The trend reversed when the EMEA 9 crossed below that EMJ twenty a point C as you may notice the blue
line was below the red line and these lines were below the orange line as well.
So we could consider this a stronger downtrend signal.
The trend reversed when the blue line crossed above the red line here a point D.
We also had a support level here at around sixty five hundred dollars.
So we could easily predict that the price was going to go up soon again for the sake of your money safety.
You'll want to avoid some cases that the EMJ acts as a dynamic resistance.
So in this example we would enter the trade when the price already broke above the EMJ 50
OK.
Another example.
Now we have the EMEA 9 crossing below that EMJ twenty eight point day.
The orange line was above the red and blue lines and the price fell below.
All of these moving averages.
So we could predict that this was a strong downtrend.
The price dropped by over 35 percent from 11000 Satoshi to about 7000 Satoshi.
We had a resistance level here at around ten thousand five hundred Santoshi and a support level at around
7000 Santoshi.
So we could easily predict that when the price fell to the 7000 mark it would likely go back up again.
As you can see the trend reversed when the blue line crossed above the red line at point B.
And because there was a resistance at ten thousand five hundred Santoshi what I would do in this case
is to sell my coins at around ten thousand two hundred Santoshi or three percent below that resistance
level the price started to drop when it failed to break up through the resistance zone.
So we could guess that the trend would reverse soon.
We also have a support level here at about 9000 Santoshi that helped push the price back up many times
but the price already fell below that support level.
So in this case we can predict that the price will likely drop to the 7000 mark again and then bounce
back up.
So what we want to do now is to wait until the price it's the 7000 mark and bounces back up then we'll
buy the coin at a low price for sweet profits.
OK let's have a look at another example.
Now let's analyze this chart quickly.
Looking at point.
We had a downtrend signal here.
The trend reversed when the blue line crossed above the red line at point B.
We had a resistance level here at around forty nine hundred Satoshi.
As you can see the resistance level stopped the price from rising up many times.
So we could guess that the trend would likely reverse soon.
The price started to drop when the EMJ nine crossed below that EMH 20 a point C when the price fell
below that EMJ 50 and DMA 50 was above the blue and red lines we could consider this a strong downtrend.
We have another resistance and support level here so we can easily predict that the price will likely
bounce between the support and resistance lines.
In this example what I want to do is to wait until the price hits the support level at around 40 100
Santoshi and bounces back then I'll buy the going back at a low price for an easy profit
Okay.
Another example we had an uptrend signal when the blue line crossed above the red line at point day.
The uptrend signal was stronger when EMJ 9 was above the EMJ 20 and both lines were above the EMJ 50
and the price was above.
All of these moving averages as you can see on the chart the price of a theory went up by about 25 percent
from $660 to over $800 per coin.
The trend reversed when the EMEA 9 crossed below the EMJ 28 point B.
The downtrend signal was stronger when the price dropped below that EMJ 50 the price went back up again
when the blue line crossed above the red line at point C.
But this time the Orange Line was above the blue and red lines.
This was a weak uptrend signal because the IIM-A 50 could act as a dynamic resistance that prevented
the price from rising up.
In this case you should avoid making a trade and wait for another signal.
The trend reversed again when the EMJ 9 crossed below that EMJ 28 a point D.
As you can see we have a support level here at $695.
So in this case we can guess that the price will drop to $695 and then bounce back up OK.
The last example we had a downtrend signal here a point but that EMJ 50 was below the blue and red lines
so we could consider this a weak downtrend signal that IIM-A 50 could act as a dynamic support.
That stopped the price from falling down.
We had another downtrend signal one that EMJ nine crossed below that EMH 20 again but this time the
EMJ 50 was above the blue and red lines so we could confirm that this was a valid downtrend.
As you can see on the chart we had a support level here at about $144 so you could easily predict that
the previous downtrend would end soon.
The price was going to drop and hit the support level a few times and then bounced back up.
The blue line also crossed above the red line at point C so we could predict that the trend had reversed.
The turn signal was stronger when the price went above all of the moving averages and that EMJ 9 and
EMJ 20 were above the IIM-A 50.
The trend reversed when the blue line crossed below the red line a point D and the downtrend signal
was stronger when the price dropped below that EMJ 50.
So now you've already mastered how to use the exponential moving averages.
I want to let you know that this simple technique is very powerful as you make a ton of money by just
trading the signals by when there's an uptrend signal and sell when there's a downtrend signal.
Easy right.
And when the downtrend ends it's time to buy back your coin at a much lower price and make a sweet and
easy profit in the next lecture.
I'll teach you the second technique that you can use to determine market trends and the most important
thing is that technique works perfectly well with what you've learned so far.
So see you in the next video.