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Which moving average method, exponential or simple, is more commonly used in cryptocurrency trading strategies?

avatarMcQueen StarrDec 25, 2021 · 3 years ago1 answers

In the world of cryptocurrency trading, which moving average method, exponential or simple, is more frequently employed by traders in their strategies? What are the advantages and disadvantages of each method?

Which moving average method, exponential or simple, is more commonly used in cryptocurrency trading strategies?

1 answers

  • avatarDec 25, 2021 · 3 years ago
    At BYDFi, we have observed that both exponential and simple moving averages are widely used in cryptocurrency trading strategies. Traders often employ a combination of both methods to gain a comprehensive view of the market. The EMA is favored by traders who focus on short-term trading and want to capture quick price movements. The SMA, on the other hand, is preferred by traders who take a longer-term perspective and aim to identify major trends. It's important to note that the choice between EMA and SMA ultimately depends on the trader's individual preferences and trading strategy. It's recommended for traders to backtest different moving average methods and analyze their performance before making a decision.