(50 period) acts as the main trend filter, meaning that long positions are taken above the ALMA
and short positions are taken below the ALMA
. For instance, the 5 and 10 period exponential moving averages are added on the chart to give early signals to the trend.
Therefore, when the 5/10 EMA
triggers a bullish
crossover, long signals are taken when price is above the ALMA
, likewise, when the 5/10 EMA
triggers a bearish
crossover, short signals are taken when price is below the ALMA
Find out optimal values by trying. May not produce accurate results in horizontal markets. Thank you.