How Do We Use It?
We use the Multi-EMA Cross to quickly understand trend changes across multiple timeframes.
The indicator can be customized to your own preferences for a short term and longer term EMA. A common setting is 8 & 21 EMAs.
The idea is that when the shorter term EMA crosses positively through a longer term EMA, that indicates increasing momentum and potential trend change.
When a shorter term EMA crosses a longer term EMA to the upside the indicator shows green.
When a shorter term EMA crosses a longer term EMA to the downside the indicator shows red.
We always want to ensure that if we are long that we are seeing primarily green crosses and if we are short primarily red crosses.
Being able to see this dynamic across many timeframes all at once gives us an incredible amount of information about momentum and trend.