Understanding the Concept of Dynamic Support and Resistance Exponential Moving Average (EMA)

In trading when we looking at Dynamic Support and Resistance it should be noted that it's a bit different from the normal horizontal support and resistance we see plotted averagely on the daily timeframe by traders although Dynamic Support and Resistance are also supported and resistance used by traders to monitor market trend they revolve around market trends without needing to be at horizontal support and resistance level. this means Dynamic Support and Resistance are not necessarily in horizontal level but can be represented diagonally on a trading chart.

Dynamic support chart

The chart above is a 4-hour timeframe of XRP/USDT taken from my binance trading application it can be observed from the above chart price of XRP has been repeatedly bouncing on the diagonal support line without going out of the support zone.

Dynamic resistance chart

The above chart is also taken from my binance trading application the circle can be seen as a marked line at which the price of XRP has been consolidating repeatedly there is a strong market pressure trying to push the price up but resistance seems very strong and the price continues to respect the diagonal resistance line.

EMA can be combined when trading this combination gives a trader a clear confirmation on how trend lines move and help such trader avoid fake make breakout.

It's important to also note when trading waiting for clear confirmation is very important to avoid liquidity, on assets a trader needs to combine either two moving average lines.

You will observe how my next screenshot will contain two lines one being EMA10 and EMA20 but will help in identifying market trends.

From your binance app click any pair chart locate the below item and select to add or customize your trading chart EMA you can add two or three EMA select colors of choice and add thickness on lines.

The above chart contains two EMA at the support level. You can also observe how the market trends try several times to break below the yellow EMA line but got rejected on several occasions.

This means there is a clear continuous trend in the upward direction traders using this strategy to traders can always make use of proper stop loss and take profit order to avoid unforeseen market correlation.

Final thought

Before entering any traders involving real capital do make sure you have probably understood the market trends and how they work always do proper analysis both fundamental and technical. Trading involves risk always use what you can afford to lose.

Dynamic Support and resistance will help guide traders when to make an appropriate entry in the market it helps filter trend lines and gives a trader clear confirmation of market movement always use stop loss when trading.