Identify Price Volatility As Early As Possible With Moving Averages

Hi all,

This may be useful for some intraday traders. I'm not the better day trader.

This is to identify price volatility as early as possible by using EMA

Concept :

If price increase, then slope of the average line should also increase. If price decrease, then slope of the average line should also decrease.

If price moves in sideways, then slope of the average line should be zero

See this picture :




Method :

Plot these two EMA : 15 Period EMA & 3 Period EMA of 15 Period EMA

If there is no difference between these two lines, then market is in indecision phase. If there is enough difference, then market is trending in one of the direction.

I use this in one hour time frame to identify market volatility then I trade in 15 mins / 3 mins timeframe

This gives me early signal than using Bollinger Band / ADX

Check these pics too :





Reagrds,
Nagappan

Identify Price Volatility As Early As Possible With Moving Averages