We use the 8, 13, 21, 34, and 55 Exponential Moving Averages in our trading system. These EMAs align with the Fibonacci Sequence. The Fibonacci Sequence is a sequence of numbers which are found and align with many patterns in the natural world.
Many traders use these numbers in their trading. As timeframes get bigger, the space between the moving averages grow.
Here is how the Fibonacci Sequence was found:
0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, …
The current number is added to the previous number in the sequence.
0+1 = 1, 1+1 = 2, 1+2 = 3, 3+2 = 5, 3+5 = 8, 5+8 = 13, 8+13 = 21,…
Read more about Fibonacci Sequence here.
