The Best Moving Average for 15-Minute Chart - Article (2024)

FAQs

The Best Moving Average for 15-Minute Chart - Article? ›

The best indicator to use on a 15-minute chart for optimum profits is the combination of the Supertrend indicator, the 5 EMA, and the 20 EMA. A Supertrend indicator is pretty similar to Moving Averages in the sense that it is plotted on price and can determine the current market price trends.

Best MA for a 15-minute chart

Therefore, the best MA to use in a 15-minute chart should be relatively short. For example, it does not make any sense to use a 100-period MA on a 15-minute chart. It also does not make sense to use a 50-MA for such a chart. Instead, you should use relatively shorter-dated moving averages.

15-Minute Forex Scalping Strategy

The MACD is a momentum oscillator indicator that helps traders identify trend direction and whether the bullish or bearish momentum in the price is strengthening or weakening.

The best ADX settings for a 15-minute chart depend on the trader's preferences and trading style. However, some commonly used settings are 14 for the period, and 25 for the threshold level.

Common Moving Averages Periods

Traders and market analysts commonly use several periods in creating moving averages to plot their charts. For identifying significant, long-term support and resistance levels and overall trends, the 50-day, 100-day and 200-day moving averages are the most common.

The best MACD settings for a 15-minute chart are parameters 24, 52, and 18. However, this setting is only a few percent better in our case study than the default setting 12,26,9. This setting is the best for small time frames.

Traders calculate the MACD scalping indicator by subtracting the 26-day EMA (exponential moving average) from the 12-day EMA, with the 9-day EMA set as the MACD default setting or signal line to mark buying and selling triggers.

Place a 5-8-13 simple moving average (SMA) combination on the two-minute chart to identify strong trends that can be bought or sold short on counter swings, as well as to get a warning of impending trend changes that are inevitable in a typical market day. This scalp trading strategy is easy to master.

Scalpers usually work within very small timeframes of one minute to 15 minutes. However, the one- or two-minute timeframes tend to be favoured among scalpers.

The 20 EMA is the best moving averages to use in the 15-minute charts because the price follows it most accurately during multi-day trends. In other words, you can easily identify the trend from there.

Which is better RSI or ADX? ›

ADX and RSI

An RSI reading of above 70 implies overbought conditions, whereas a reading of below 30 implies oversold conditions. A buy order in a ranging market will be when the price is drifting lower, with an ADX reading of below 25, and when the RSI is showing oversold conditions.

The traditional setting for the ADX indicator is 14 time periods, but analysts have commonly used the ADX with settings as low as 7 or as high as 30. Lower settings will make the average directional index respond more quickly to price movement but tend to generate more false signals.

Exponential Moving Average (EMA or EWMA)

Exponential moving averages give more weight to the most recent periods. This makes them more reliable than the SMA and a better representation of the recent performance of the security and hence can be used to create a better moving average strategy.

Exponential Moving Average (EMA)

An exponential moving average tends to be more responsive to recent price changes, as compared to the simple moving average which applies equal weight to all price changes in the given period.

The simple moving average (SMA) is the most widely used. It is called the simple moving average because each data point is equal-weighted in the calculation. The SMA can be 5-day, 13-day, 21-day or any period of time that a trader finds useful. Analysts can use the simple moving average as a signal to buy or sell.

For day trading, 15-minute charts and 30-minute charts are the best. Day traders who use indicators in their day trading strategy can use a 15-minute or lower time frame. In the case of price action-based trading, a combination of the 15-minute and 30-minute time frames is the best.

If you are a seasoned trader, trading within the first 15 minutes might not be as much of a risk. For beginners, it's recommended to wait until 9:30. The reason behind this is simple; in the first few minutes of the market opening, stocks are likely reacting to the previous night's news.

So if you're a novice, you may want to avoid trading during these volatile hours, or at least within the first hour. However, for seasoned day traders, the first 15 minutes following the opening bell is prime time, usually offering some of the biggest trades of the day on the initial trends.

When we apply 5,13,1 instead of the standard 12,26,9 settings, we can achieve a visual representation of the MACD patterns. These patterns could be applied to various trading strategies and systems, as an additional filter for taking trade entries. It is argued that the best MACD setting for a MACD pattern is 5,13,1.

Typical MACD Settings

The typical MACD default settings are (12,26, 9) and refers to the following: (12) – The 12 period exponentially weighted average (EMA) or 'fast line' (26) – The 26 period EMA or 'slow line' (9) – The 9 period EMA of the MACD line, known as the 'signal line'

What is a good MACD number? ›

MACD crossing above zero is considered bullish, while crossing below zero is bearish. Secondly, when MACD turns up from below zero it is considered bullish.

In a scalping strategy, a buy position must match the following criteria: To establish a buy position, we must wait for the 50 EMA (Exponential Moving Average) to cross above the 100 EMA.

Scalpers usually work within very small timeframes of one minute to 15 minutes. However, the one- or two-minute timeframes tend to be favoured among scalpers.

The 8- and 20-day EMA tend to be the most popular time frames for day traders while the 50 and 200-day EMA are better suited for long term investors. Sometimes markets will flat-line, making moving averages hard to use, which is why trending markets will bring out their true benefits.

In scalping, a 3:1 risk to reward ratio is common (although, lower risk/reward is always more favorable). This may sound backwards because it means risking $0.60 on a trade to make a $0.20 reward.

A one-minute scalping strategy is a great technique for beginners to implement. It involves opening a position, gaining some pips, and then closing the position shortly afterwards. It's widely regarded by professional traders as one of the best trading strategies, and it's also one of the easiest to master.

Scalpers like to try and scalp between five and 10 pips from each trade they make and to repeat this process over and over throughout the day. Pip is short for "percentage in point" and is the smallest exchange price movement a currency pair can take.

These are commonly referred to as swing traders. Scalpers team to only use 1-minute and 5-minute they might only be in a trade for 1 to 2 minutes. Whereas day traders might be in a trade all day long, and institutional long-term or swing traders might be in a trade for days, weeks, months, or even years.

The number 5 stands for choosing 5 currency pairs that a trader would like to trade. The number 3 stands for developing 3 strategies with multiple combinations of trading styles, technical indicators and risk management measures. The number 1 guides traders to choose the most suitable time for trading.

First, scalping refers to a situation where a trader holds a financial asset for less than 5 minutes. In most cases, a scalper can hold a trade for even two minutes. Day traders, on the other hand, can hold trades for several hours. Second, scalping requires opening tens or even hundreds of trades per day.

What time frame is best for 50 EMA? ›

What Timeframe to Use for the 50 EMA Strategy. The 50 EMA strategy is typically used on medium-term timeframes, such as the 4-hour or daily charts. Using a longer timeframe can help to filter out noise and provide a clearer picture of the trend.

In general, the EMA is set at 9 by default. This is good for the short term, but most intraday traders pick the value of 8 or 20 to get a better interpretation of price information and to make trade decisions. Here the price trending above the moving average gives the bullish signal.

50-days and 200-days EMA Crossover

50-days and 200-days EMA's are considered best suited moving averages for positional trading strategy.

Limitations of ADX

It is a lagging indicator. ADX may not be a good indicator for less volatile stocks, and for the more volatile ones, there may be too many false signals generated. ADX is not sufficient. It needs to be used in conjunction with other indicators for the purpose of trading.

First, it is a relatively difficult indicator to calculate. Second, when used alone, the ADX indicator can show you the wrong signals as shown above. Finally, it can only be used in some market conditions such as when the asset is trending.

The Aroon Indicator. The ADX indicator is composed of a total of three lines, while the Aroon indicator is composed of two. The two indicators are similar in that they both have lines representing positive and negative movement, which helps to identify trend direction.

Which Settings Are Best for ADX? The most common settings for ADX usually are a 14-period length together with a high volatility threshold at 25, and a low volatility threshold at 20. In other words, a market is thought to be volatile when ADX is above 25, and calm when it's below 20.

In the 2-period ADX Trend Trading Strategy, we are using a 2-period ADX to catch low risk entries in a trending market. The concept underlying the 2-period ADX is to find the perfect pause in the market. By using such a short look-back period for the ADX indicator, it becomes extremely sensitive.

The MACD is going to detect the trend reversals, while the ADX is showing either the trend is strong or fading.

The Hull Moving Average (HMA), developed by Alan Hull, is an extremely fast and smooth moving average.

Which moving average is best for stop loss? ›

#4 Moving averages

The “well known” moving averages, such as the 50, 100, 200 daily moving averages act as natural support and resistance. Thus, it can pay off to have them on your charts and place your stops outside of those moving averages.

The zero-lag exponential moving average (ZLEMA) is a type of exponential moving average that seeks to reduce the inherent lag seen in a typical moving average. It was designed to track the price more closely and give a clearer view of the trend with no lags.

The 100-period moving average is considered to provide stronger support for price when compared to the 9-period moving average. Traders can use any moving average that they like, some common lengths are the 9, 21, 50, 100 and 200 period moving averages.

Swing traders can use moving average crossovers as strategies to enter trades. They can calculate the average closing price of a share over 20 days, 50 days, 200 days etc. These are known as simple moving averages (SMA) and are represented as a line of the chart.

Since EMAs place a higher weighting on recent data than on older data, they are more reactive to the latest price changes than SMAs are, which makes the results from EMAs more timely and explains why the EMA is the preferred average among many traders.

The 20 EMA is the best moving averages to use in the 15-minute charts because the price follows it most accurately during multi-day trends. In other words, you can easily identify the trend from there.

For short-term trades the 5, 10, and 20 period moving averages are best, while longer-term trading makes best use of the 50, 100, and 200 period moving averages.

The 8- and 20-day EMA tend to be the most popular time frames for day traders while the 50 and 200-day EMA are better suited for long term investors.

The moving average (MA) is a simple technical analysis tool that smooths out price data by creating a constantly updated average price. The average is taken over a specific period of time, like 10 days, 20 minutes, 30 weeks, or any time period the trader chooses.

A common trading strategy utilizing EMAs is to trade based on the position of a shorter-term EMA in relation to a longer-term EMA. For example, traders are bullish when the 20 EMA crosses above the 50 EMA or remains above the 50 EMA, and only turn bearish if the 20 EMA falls below the 50 EMA.

How do you use 8 and 20 EMA? ›

The EMA 8/20 strategy uses two exponential moving averages:

The moving averages allow us to determine the direction of the trend that we will trade with and the level that will trigger our trade (open PUT in a downtrend or CALL in an uptrend).

5-8-13 Moving Averages

The combination of five, eight, and 13-bar simple moving averages (SMAs) offers a perfect fit for day trading strategies. These are Fibonacci-tuned settings that have withstood the test of time, but interpretive skills are required to use the settings appropriately.

The most commonly used moving average is a so-called simple moving average (SMA), which is the average closing price of a given security over a specific number of days. For example, you can find a stock's 20-day SMA by adding its prices over 20 days, then dividing that number by 20.

If the faster EMA (5 EMA) crosses the slow EMA (8 EMA) to the upside then its sign of an uptrend. If 5 EMA crosses 8 EMA to the downside, Its a sign of a downtrend. Strategy: You can use this strategy for any Stocks, Forex and Commodities. Buying Rules: Wait for 5 EMA to cross 8 EMA to the upside.

The 9-EMA strategy is a technical analysis strategy that uses the 9-day exponential moving average (EMA) to generate buy and sell signals for trading securities. It uses 9-EMA to identify short-term market swings in the price of a security.

The 21-day exponential moving average (EMA) can be a powerful tool for investors. Though it is most powerful in a bull market, it has plenty of use during bear markets as well. Like the commonly used 50-day moving average, the 21-day takes the closing prices of the past 21 sessions and averages them out.

Traders calculate the MACD scalping indicator by subtracting the 26-day EMA (exponential moving average) from the 12-day EMA, with the 9-day EMA set as the MACD default setting or signal line to mark buying and selling triggers.

A short term moving average is faster because it only considers prices over short period of time and is thus more reactive to daily price changes. On the other hand, a long term moving average is deemed slower as it encapsulates prices over a longer period and is more lethargic.

It makes EMA more sensitive and more responsive to the current market conditions. Therefore, the exponential moving average may be considered the best moving average for a 5 min chart. A 20-period moving average will suit best. The MACD indicator is based on the exponential moving averages.