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How and when to use DMA

Discussion in 'Technical Analysis' started by prabhu_v, Aug 22, 2016.

  1. prabhu_v

    prabhu_v New Member

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    Shabbir,

    Please let me know when to use DMA or EMA and the period to be selected some say 50 day, 100 day, 200 days. Please share your knowledge regarding the same.
     
    prabhu_v, Aug 22, 2016
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  2. shabbir

    shabbir Administrator Staff Member

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    @prabhu_v EMA or DMA or any moving averages are not used for identifying the entry point for any stocks but are mainly used for identifying the trend.

    So Ideally 200DMA and 50DMA are used for identifying the trend where 50 DMA should be higher than 200DMA to classify as uptrend.

    If you are using 3 DMA, it has to be 200DMA at the lowest point then 100DMA above it and 50 DMA at the top to identify an uptrend. If the lines are reversed, the stock is assumed to be in down trend.

    Ideally for EMA or WMA, you will use smaller duration like 50, 20 and 9. If you are using 2 EMA's then it has to be 20 and 9.
     
    shabbir, Aug 22, 2016
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  3. prabhu_v

    prabhu_v New Member

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    Thank you.
     
    prabhu_v, Aug 22, 2016
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  4. shabbir

    shabbir Administrator Staff Member

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    The pleasure is all mine.
     
    shabbir, Aug 22, 2016
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