Techniques & Applications Behind The 50-Day EMA (INTC, AAPL).
This makes sense when taking into consideration that the 50-week EMA specifies suggest reversion over an entire year while the 50-month EMA tracks even more than 4 years of market activity, approaching the typical length of a normal business cycle. Price activity after that entered a 2 month game of 50-200 pinball, going across even more than 75 points between new resistance at the 50-day EMA and also lengthy term support at the 200-day EMA. Or play a game of pinball, trading oscillations in between the 50-day EMA and also longer term 200-day EMA.
This makes sense when considering that the 50-week EMA defines indicate reversion over an entire year while the 50-month EMA tracks even more than four years of market task, coming close to the ordinary length of a typical service cycle.
50-200 Day Pinball
Fast patterns in both instructions often tend to raise the splitting up between the 50 and also 200-day EMAs. Cost action then got in a 2 month video game of 50-200 pinball, passing through even more than 75 points in between new resistance at the 50-day EMA and also lengthy term assistance at the 200-day EMA.
The Bottom Line
The 50-day EMA determines an all-natural mean reversion level for the intermediate time frame.
The 50 and 200-day EMAs have morphed from narrow lines into broad zones in the last two decades due to aggressive stop hunting. (For related reading, see: Stop Hunting With The Big Forex Players). You need to consider how deep these violations will go before placing a stop or timing an entry at or near the moving average. Patience is key in these circumstances because testing at the 50-day EMA usually resolves within three to four price bars. The trick is to stay out of the way until a) the reversal kicks in or b) the level breaks, yielding a price thrust against your position.