Moving Average exponential is a trend following indicator.

Being a trend following indicator, moving average exponential is a member moving average indicators thus it was created to help traders to know the direction of the market, that is whether the market is trending upwards or in a downwards direction. Because of this, it is therefore considered to be based on support and resistance.

It puts more weight on current price than on previous price. This makes it to give accurate result as compared to other moving average indicators.

Unlike other moving average indicators, the value of moving average exponential is calculated as follows;

EMA= (Current priceZ)+(previous EMA(1-Z)
Where Z is the smoothing constant % for price value calculated as 2/(n+1)
where n is the number of periods.

Therefore, since moving average exponential is a trend following indicator and is based on bullish and bearish ,it therefore follows that when the market is in an upward trend,the moving average exponential will also be moving upwards.On the other hand, when the market is in a downward trend, the moving average exponential will also be moving downwards. This can further be explained as follows;

1. Exponential Moving Average bullish cryptocurrency market

When the market is moving downwards, the exponential moving average will also be moving downwards. When the price in the market falls below the exponential moving average when the movement is downwards, an upward reversal will take place.This will signal the cryptocurrency trader of a support point over there thus signalling them to purchase a given amount of cryptocurrency . The cryptocurrency trader can either place a market buy order or a limit buy order. This is indicated as from below;

The above is the TRX market against USDT. Two points are being indicated. There is point A and point B. Point A is the exponential moving average while point B is the support point. Before point B, the market and the exponential moving average were moving downwards. At point B, the price in the market then falls below the lowest low point of exponential moving average thus creating a support point over there. The market and the exponential moving average then reverse and start moving upwards thus signalling the cryptocurrency trader to purchase a given amount of TRX with their USDT. The trader can either place a market buy order or a limit buy order. When the order is being placed, the account of the trader will start increasing in value in terms of USDT.

2. Exponential Moving Average bearish cryptocurrency market

When the market is moving upwards, the exponential moving average will also be moving upwards. When the price in the market rises above the exponential moving average when the movement is upwards, a downward reversal will take place.This will signal the cryptocurrency trader of a resistance point over there thus signalling them to sell a given amount of cryptocurrency which they had initially purchased and are currently holding . The cryptocurrency trader can either place a market sell order or a limit sell order. This is indicated as from below;

The above is the TRX market against USDT. Two points are being indicated. There is point A and point B. Point A is the exponential moving average while point B is the support point. Before point B, the market and the exponential moving average were moving upwards. At point B, the price in the market then rises above the highest high point of exponential moving average thus creating a resistance point over there. The market and the exponential moving average then reverse and start moving downwards thus signalling the cryptocurrency trader to sell a given amount of TRX which they had initially purchased and is currently holding. The trader can either place a market sell order or a limit sell order. When the order is being placed, the account of the trader will have increased in value in terms of USDT.

cryptocurrency market is a highly volatile market. As a cryptocurrency trader,whenever you place a buy order,always make sure to apply risk management so that whenever your buy order goes against you, your account do not depreciate so much in value.

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