What it measures
An EMA averages recent closes, giving more weight to the newest ones, so it reacts faster than a simple moving average. Its slope shows trend direction and its distance from price shows how stretched a move is.
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Starting settings by expiry
| Expiry | Settings | Signal |
|---|---|---|
| 1 min | EMA 9 and 21 on 15-sec candles | Bounce off EMA 21 in trend |
| 5 min | EMA 9 and 21 on 1-min candles | Cross + pullback |
| 15 min | EMA 20 and 50 on 5-min candles | Trend filter |
Starting points for testing on a demo account, not proven profitable settings.
How traders use it
- Trend filter: calls only above a rising EMA, puts only below a falling one.
- Two-EMA cross: a fast EMA (e.g. 9) crossing a slow one (e.g. 21) marks a shift in short-term trend.
- Pullback entries: in a trend, price returning to the EMA and bouncing is a common entry point.
Where it fails
- In ranges, crosses happen constantly and mean little.
- Any moving average lags price.
Works well with
- RSI (Relative Strength Index) — Momentum oscillator from 0 to 100.
- MACD — Trend and momentum from two moving averages.
FAQ
EMA or SMA for short expiries?
EMA reacts faster, so most short-term traders use it. The difference shrinks on longer periods.
ExpiryLab Editorial Research desk We open broker accounts from our target countries, test deposits and withdrawals, and log what we measure.
How this page was made: drafted with AI assistance from public sources and our own test logs, then checked and edited by the ExpiryLab editorial team. The date above shows the last check. How we test · Editorial policy