Double Exponential Moving Average (DEMA) in FX Replay

The Double Exponential Moving Average (DEMA) is an advanced trend-following indicator that offers a faster response to price action compared to a traditional EMA. It smooths price data twice, helping traders detect shifts in trend direction more quickly and with less lag.

How It’s Calculated

• Choose a period (e.g., 20).
• Calculate the first EMA on price.
• Calculate the second EMA (EMA of the first EMA).
• Apply the formula:
• DEMA = (2 × EMA) − EMA of EMA

This creates a smoother, faster-reacting line compared to a standard EMA.

How to Use DEMA in FX Replay

Trend Detection:

• An upward-sloping DEMA typically confirms an uptrend.
• A downward-sloping DEMA suggests a downtrend.

Price Crossovers:

• Price crossing above the DEMA may signal a bullish shift.
• Price crossing below the DEMA could signal bearish pressure.

Bounce Confirmation:

• Price bouncing off the DEMA during a trend can confirm support or resistance behavior.

Dynamic Support/Resistance:

• Use DEMA as a reference line for placing stops, entries, or dynamically managing trades.

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