The TEMA is a triple smoothed exponential moving average, which reduces the lag between the indicator and the price action.
The basic TEMA signals: The same as with any other moving average – the price crossover is the signal.
Bullish Crossover: A candle is closed from the upper side of the TEMA line
Bearish Crossover: A candle is closed from the lower side of the TEMA line
When the price breaks the triple exponential average, we get an entry or exit signal in the respective direction. Please see the above chart to more details.
Volume Weighted Moving Average (VWMA) The VWMA acts as a standard moving average on the chart. The difference between the VWMA and the simple moving average, is that the VWMA places emphasize on periods with higher trading volume. This makes it the perfect tool to combine with the TEMA.
TEMA + VWMA: We enter trades on TEMA and VWMA crossovers in the direction of the cross. We exit trades when price breaks the VWMA in the opposite direction.
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