Reading Candles Across Multiple Timeframes
Candles summarize price movement over a chosen interval; the interval changes the question each candle answers.
Read the draftTrading Concepts
What Are the 20, 50, and 200 EMAs?
A 20-, 50-, or 200-period exponential moving average smooths prices across that many observations while putting more weight on recent values. The number counts bars, not automatically days.
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Period and timeframe both matter
A 20 EMA on a five-minute chart uses 20 five-minute observations; a 20 EMA on a daily chart uses 20 daily observations. Comparing the lines without naming the interval can be misleading. The common 20/50/200 set supplies short, intermediate, and longer lookbacks on the same chart.
Why exponential feels faster
An EMA updates from the prior EMA and the newest price, with a larger share assigned to recent prices than in a simple moving average of the same length. A shorter period generally reacts faster but also changes direction more readily in noisy trading.
Direction is an observation
A rising 20 EMA above a rising 50 EMA can describe current alignment under the selected inputs. It is not an instruction to buy. A price crossing a line during an open candle may reverse before that candle closes; compare completed readings and the actual price structure.
Sources and further reading
- CME Group: Understanding Moving AveragesSimple and exponential moving-average definitions and calculation