MOVING AVERAGE Trading Strategy MASTERCLASS for Beginners | EMA Strategy

Now here I had set a moving average of 50 period So it was getting far from the moving average of 50 period So I will adjust this a little and I will set a moving average of 40 period Now I have set a moving of 40 period So it has come a little close But it is not taking any resistance here So I will change this a little more In the chart, the two lines that you can see These two are the lines of moving average And this moving average is such a useful thing That it will be useful in every chart It will help you to confirm your trade many times It will help you to save your loss many times It will help you to tell the trend many times It has many uses And you can use it not only in trading But you can also use it in investing But what is this moving average? How to use this moving average? I will tell you in detail And I will also give you some tips related to this Which very few people know So do watch this video And do tell me in the comment box Do you do trading? And how many times have you started trading? So first of all, let's understand What is this moving average? So I will first remove this from the chart And first I will simply explain to you What is it actually? So look, in moving average An average word is being used With this you must be understanding That this is an average If you see the share price in the chart Then it means That this is the average of the share price Now what is the average time? So the time you want to see the average You can put the average here For example, if you want to see The average of the share price For the last 10 days What is the average price of the share? So for this If you divide the share price From 10 Then you will get the average price of the share Let's understand this with an example For example, the price of the share On the first day was Rs.190 On the second day it was Rs.188 On the third day it was Rs.186 And so on, whatever the price was You can see it on the screen So now if we want to find the average And find out What is the average price of the share So for this, in the last 10 days We will add the share price And after adding, if we divide it by 10 Then we will get an average So in the same way The price of the share The average of that You can find out from the moving average Now what is this average? But why is it a moving average? So this is a moving average Because if you want to calculate The moving average of 10 days Then on the 10th You will add the price from 1 to 10 And divide it by 10 But what will you do on the 11th? The price from 2 to 11 The price from 2 to 11 You will divide it by 10 As soon as the 12th comes Then we will leave the 2nd On the 13th, we will leave the 3rd And we are taking the average of the last 10 days So because the price of the share is moving So this is a moving average Now the average that I showed you Was a simple moving average But if I ask you If something happened 10 days ago Is it more important? Or if something happened 1 day ago So obviously What happened 1 day ago is more important So while calculating the average What happened 1 day ago We should pay more attention to it So there is a way to calculate it Which is called exponential moving average In short, it is also called EMA So in this case To calculate the exponential moving average We will give more weightage To the 9th or 10th In comparison to 1st or 2nd Now it is clear What is moving average? How is it calculated? What is simple moving average? And what is exponential moving average? Now because you know In exponential moving average The recent data Is given more weightage So if you calculate simple moving average Or exponential moving average It will not make much difference But because the past event Is given more weightage You can use both Simple moving average And exponential moving average So now let's understand How to calculate simple moving average Or exponential moving average In any chart There is an indicator section Go to that indicator And search for moving average If you search for moving average You will see simple moving average And if you want Exponential moving average You have to type EMA And here you will see Exponential moving average Now as soon as you type Exponential moving average You will see a blue line Which is 9th period Exponential moving average Now to know What is the period of moving average You have to click on Setting option Go to input You will see 9th period It means It is the moving average of Last 9 candles Not of last 9 days Many people think 9 means Moving average of last 9 days But it is not like that It is the moving average of last 9 candles Now this moving average By default is of 9th period But everyone uses it Like most of the famous ones Are 20th period 50th period 200th period Is for long term investing But if you do trading You will see 20th and 50th period And sometimes 5th or 7th period Or according to you You can apply any period Now I will give you a pro tip How many period of moving average You should use For now, I will set 20th period And along with this Because this blue line is very thin I will make it a little thicker So that you can see it clearly Now you can see this blue line This is 20th period Exponential moving average Now you have to apply this indicator But the main point is What does this indicator do? Before that, let me tell you This moving average is a lagging indicator Because you know The price of last 10 days By averaging it, it tells you the price So it is always behind the price Now this does not mean That it is bad It is a very useful indicator And I think it is used for Exponential moving average So the first thing this indicator shows Is what is the trend in the chart Through this indicator You can find the trend in the chart You have opened any random chart Now you don't understand its trend You want to know Is the stock in uptrend, downtrend Or sideways trend So this indicator will help you Because you know that Trend is your friend until it bends That is, it is always said that The direction in which the trend of the chart is You should take the trade in that direction So you are understanding the trend from here So think how much it is helping you in trading Now how will you understand the trend from this There are three types of trends Uptrend, downtrend, sideways trend If you don't know anything about it Then see, we have made a detailed video On technical analysis In which we have taught you to do We have taught you about trends We have taught you about support resistance You watch that video once But still in short I will tell you Uptrend means that the price of the share is increasing Downtrend means that the price of the share is falling And sideways trend means That the price of the share is rotating in the same place In more detail in our technical analysis You will get to know in the video So now this moving average How will it tell us if the chart is in uptrend or downtrend So see it is very simple You have put a moving average here Now after putting this moving average If the price of the share is above this moving average Then it means that The stock is in uptrend Like here you can see that the price of the share Is above the moving average of 20 period It means that the stock is in uptrend And here you can see that the price of the share The price which you can see Is below our exponential moving average So it means that The stock here is in downtrend Means the price is falling So how is uptrend, you have understood But how will we know sideways trend So whenever the price of the share Is coming in between this line Then we can assume that There is a sideways trend Like here you can see The price of the share is rotating around this average So in this way You have understood In which trend the stock is Because here you can see that the price of the share Is below the moving average So it means that the stock is in downtrend And when you know that the stock is in downtrend Then you know that You just have to take sell trades You don't have to take buy trades Or you have to avoid Now the second information that we get from moving average Is trend reversal Means whenever the trend changes We can know that from moving average So I have told you when a stock is in uptrend When it is in downtrend And when it is in sideways trend I want to know that whatever I have taught you Did you understand it correctly or not So do tell me in the comment When is it in uptrend When is it in downtrend and when is it in sideways If you comment it Then you will remember it forever So now because you know that If the price of the share is above the moving average Then the stock is in uptrend And if the price of the share is below the moving average Then the share is in downtrend So if ever the price of the share Was above the moving average Like in this case you can see That the price of the share was above the moving average But at this place The price of the share is below the moving average So whenever this happens We can understand from here Because the price of the share Is below the moving average It means that If the trend has reversed, earlier the stock was in uptrend and now it is in Similarly, here you can see that the share price was below the moving average. But here the share price is above the moving average. This means that here also the trend has reversed and now the stock is in uptrend. So how will we know the trend reversal? Simply, if the share price cuts the moving average this means that the stock is in downtrend. And if the share price cuts the moving average upwards, this means that the stock is in uptrend. Now if you have understood when the trend reversal happens, then do comment on it. And if you are liking the video, then do like the video. And to watch more videos like this, do subscribe to our channel. Now the third thing that we know from the moving average is the support and resistance of a stock. By the way, how to know the support and resistance of a stock if you don't know, then watch our analysis video. In that, we have also told you about it. But through the moving average, we can find out the support and resistance of a stock. Because it has been seen many times that the stock takes resistance or support near the moving Like in this case, you can see that the stock is in downtrend and at some point, it feels like going here, the share price is falling down again and again. Like in this case, you can see that after going here, the share price fell down again and again. Then it took resistance here and here. Now here I had put a moving average of 50 period. So it was getting far away from the moving average of 50 period. So I adjust it a little and I make it a moving average of 40 period. Now I have made it a moving average of 40 period. So it has come a little close. But it is not taking resistance here either. So I change it a little more and see where it is taking resistance. You also try it yourself. By the way, most people say to use 20 period or 50 period. But these are theoretical things. You have to do it practically yourself. Like here, we practically changed it and made a moving average of 30 period. So now you can see that the price of the stock is falling again and again after reaching the moving average of 30 period. Like here, the price went here and then it fell. Then it tried to reach here again. It fell again. Then it tried here for the third time. It fell again. Tried for the fourth time. It fell again. That is, the price of the share is taking resistance here again and again. So you have seen three times that the price of the share took resistance here. So you know that when the price will go here again, then it can take resistance. Now don't trade on the basis of this. But this will give you a good idea that the price is falling here again and again. And this will help you learn about charts. Try it yourself. Look at the charts with different indicators. Especially look at the moving average. Try to learn how the charts are working. Where the price is falling again and again. From which points the price is increasing. So you can see that the price of the share has taken resistance here too. Now after this, you can see that the price of the share took resistance till here. After that, the price of the share went sideways. And once the price of the share broke this resistance, after that the price of the share increased. If a stock or a chart is taking resistance at 30 exponential moving average, then it will take at 30 every time. It may be taking resistance at 30 here, but in the future it may take resistance at 35. Or it may take resistance at 40. So you have to try this yourself. Now look at the example of support. Support is the point where the price of the share increases again and again. So here you can see that the price of the share was here, then it increased. Then it came to this point again, then it increased again. So here you can see that the price of the share has taken support again and again. So in this way, you can find support and resistance in a chart. After this, you can see that as soon as the price of the share broke this support, after that how the price of the share fell. So from here you can get a lot of information about the support and resistance of the share. So here you have understood support and resistance. And along with this, I also told you that here I will tell you how much moving average you have to and how much resistance you have to take. So here I will tell you how much moving average you have to take. So see, if you are using only one moving average, by the way, not one moving average is used in the generally two moving averages are used. But if you are using only one moving average, then apply it in the chart and see which is the average after which the price of the share is falling again and again or increasing. And from this you will know which moving average is being applied here. Finally, to know the next information we get from the moving average, to know that information, we to apply two moving averages on the chart. Right now we have applied only one moving average, we have to make it two. So first I will remove both the moving averages and then I will apply the moving average in front you. So to apply the moving average, you have to go to the indicator and if you want to apply then write EMA and if you want to apply simple moving average, then you can write MA. So I want to apply EMA, so I have searched by writing EMA and I have got the moving average written in front of me and if I click it twice, then it will be applied twice on my chart. So here you can see that it has been applied twice on my chart. Now two moving averages have come in front of you, but we don't have to take these two moving of the same period, we have to take a moving average of a short period, in which we assume that we a moving average of 20 period. So I have taken a moving average of 20 period and the color of this I change it to green. So here I have made it green and I increase its thickness a little. So this is our 20 period moving average. And after this, we have to take a moving average of a large period, so I change it to a moving of 50 period. You can also change this according to you. If you want to invest for long term, then you can take a moving average of 50 or 200 period. So I change my second moving average to 50 period. So I have made it 50. And along with this, I change its color to red. I have made it red and I increase its thickness a little so that you can see it easily. So now you can see that we have two moving averages in front of us. The moving average of the red color is our 50 period, that is, the moving average of the longer And the moving average of our green color is our short period, that is, the moving average of 20 So look, there are two types of crossovers here, in which one moving average cuts the other moving up or down. So first, let's talk about the Golden Crossover. So in the golden crossover, our short period moving average that is, the moving average of the color cuts our long period moving average, which is our red color upward. So here you can see that we have a golden crossover. The long period moving average is cut upward by the short period moving average. So whenever there is a golden crossover, There is a common crossover in which the moving average of the large period cuts the moving average the short period upwards. So it is believed that the trend has changed in the stock and the price of the stock can increase here. So generally people suggest to buy here. But I will tell you that you should not buy by looking at one indicator. Because if you do this, then your stop loss will hit again and again. So whatever strategy you are applying, whether you are using candlestick patterns or chart if you use these two indicators with it, then it will help you a lot and you can be confirmed that price is going to increase from here. So we can see that this is a golden crossover. Similarly, our second crossover is called the death crossover. In this, the moving average of our short period, which in this case is the moving average of green in your case it may be that you have applied another color, so in our case it is of green color. Similarly, if you look here, the moving average of our long period, which in this case is the average of red color, it cuts it downwards. So whenever it cuts downwards, then it is believed that the share price can fall from here. And because it is believed that the share price can fall from here, so it is called the death So here you can see that the death crossover happened and after that the share price is falling Similarly, you can also see here that the death crossover happened here and after that the share kept on falling down. So whenever there is a golden crossover, it gives a buy signal, and whenever there is a death it gives a sell signal. But keep in mind that you don't have to trade only on this basis. This will help you a lot in trading. But if you trade only on this basis, then you will get stop-losses again and again and chances of will increase. So this is the Moving Average Indicator, in which we have learned 4 things. First of all, we have learned to identify trends. After that, we have learned trend reversal. Third, we have learned support and resistance. And fourth, we have learned how to trade on this basis. But you don't have to trade. I have also cleared this for you. If you want us to bring such a detailed video on RSI or any other indicator, then do tell us by on whom you want to know this. And along with this, do tell us whether a stock is in uptrend, downtrend or sideways. How will we know this by using the Moving Average? I hope you liked this video. If you want to open the best Demat account for trading, then I have given some good Demat account in the description. Do check the description and don't forget to subscribe to our channel. Thank you!