The moving average exponential ribbon technical indicator is simply numerous exponential moving averages of increasing time period plotted on the same graph.
This guide explains what the moving average exponential ribbon (also called exponential moving average ribbon or EMA ribbon) is and how to recognize and interpret it with the help of example charts and trades.
Contents
What is an EMA Ribbon?
An exponential moving average ribbon is a series of moving averages of different lengths plotted on the same chart.
The number of exponential moving averages to plot varies immensely among users of this indicator but is usually between 6 and 16. Also, some users plot the simple moving average instead of the EMA.
Likewise, the lengths of the moving averages vary wildly. One must factor in the time horizon and investment objectives when selecting the lengths for the moving averages.
EMA Ribbon Example Chart and Trade
In this chart of the E-mini S&P 500 Futures contract, eight EMA’s were selected, starting with the 10-day EMA and ending with the 80-day EMA.
Potential Buy Signal
A trader may interpret a buy signal as he/she would with other moving average crossovers – the faster moving average crossing over the slower moving average.
The difference is that there are numerous crossovers. Decisions must be made as to how many crossovers must occur before a buy signal is officially triggered.
Here is a close-up of the potential buy signal crossovers:
Potential Sell Signal
Similarly, a possible sell signal is given for the exponential moving average ribbons when the moving averages begin to crossover.
However, determining how many crossovers must occur before a sell signal is officially triggered is up to the stock, futures, or forex trader.
Where to Trade Commodities Using Technical Analysis
If you’re interested in trading using technical analysis patterns like moving average exponential ribbons, have a look at our reviews of these regulated brokers available in .
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74%-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Further Reading
Learn more about technical analysis indicators, concepts, and strategies, including:
- Triple Exponential Average
- Head and Shoulders Pattern
- Gann’s Theory
- Moving Average Typical Price
- Fibonacci Retracements
For all the basics on how to trade commodities, see our introduction to commodity trading.
Also, take a look at our guides on stock, CFD, and commodity brokers to find out which online trading platforms are available in .
