If you believe in the belief that "trend is your friend" in technical analysis, then the moving average will benefit you a lot. The moving average shows the average price at a certain time in a certain period. They are called "moving" because they are measured at the same time and reflect the latest average.
One of the disadvantages of EMA is that it lags behind the market, so it may not be a sign of trend change. In order to solve this problem, the short-period moving average of 5 or 10 days will better reflect the recent price trend than the moving average of 40 or 200 days. Alternatively, a moving average can be used by combining two moving averages with different time spans. Whether using a 5-day or 20-day moving average or a 40-day and 200-day moving average, a buy signal is usually detected when the short-term average crosses the long-term average. On the contrary, when the short-term moving average crosses the long-term moving average, it will prompt the sell signal.
2. Support and resistance
Support level and resistance level are the points in the chart that are subjected to continuous upward or downward pressure. The support level is usually the lowest point of all chart modes (hourly line, weekly line or annual line), while the resistance level is the highest point (highest point) in the chart. When these points show a recurring trend, they are considered as support and resistance. The best time to buy/sell is near the unbreakable support/resistance level. Once these levels are broken, they often become reverse obstacles. However, in the falling market, once the support level is broken, it will turn into resistance.
3. Lines and channels
Trend line is a simple and practical tool to identify the direction of market trends. An upward straight line is formed by connecting at least two consecutive low points. Naturally, the second point is definitely higher than the first point. The extension of the straight line helps to judge the running path of the market. Upward trend is a specific method to identify the support line/support level. On the other hand, a downward line is drawn by connecting two or more points. The variability of transaction lines is related to the number of connection points to some extent. However, it is worth mentioning that these points don't have to be too close. A channel is defined as an upward trend line parallel to the corresponding downward trend line. The two lines can represent the price rising, falling or horizontal channels. The common properties of channels that support the connection points of trend lines should be located between the two connection points of their reverse lines.
Step 4 look for trends
As for technical analysis, the first sentence you may hear is the following proverb: "Trend is your friend". Finding the leading trend will help you have a comprehensive view of the overall market orientation and give you a sharper insight, especially when short-term market fluctuations disrupt the overall market situation. Weekly chart and monthly chart analysis are most suitable for identifying long-term trends. Once you find the overall trend, you can choose the trend within the time span you want to trade. So you can buy or sell in the rising trend.