What is the "Trend" & What Moving Averages to Use?

Overview

This video is an introduction to the main moving averages and indicators used in my trend-following trading system. The purpose is to help new or learning members understand how to set up and interpret core trend indicators on their charts.

Introduction to the Trend Concept

The "trend" in my system is based on the behavior of three main EMAs

13 EMA

25 EMA

32 EMA

It is the same across all time frames, I don’t change it ever.

Primary Trend-Following Moving Averages

13 / 25 / 32 EMA (Core of Trend Detection)

These act as the visual foundation for identifying whether the market is in a "trendy" state.

Purpose: Not for precision entries, but to gauge market behavior (trendy vs. choppy).

Customization: Anything between 10-30 EMA works similarly if you prefer.

Visual Setup on Chart

Red dotted line, blue stepped line, and dark blue smooth line distinguish each EMA.

Retests between these lines are used to analyze trend strength or potential reversals.

The wider the gaps between 13, 25 and 32 the more violent the trend/recent move is, the higher chances of over extension and need to reset.

The tighter the gaps between 13, 25 and 32 the higher chance "trend is reset" and/or being retested, the higher chances resolution/next impulse is coming.

Additional Moving Averages for Structure & Targets

100 MA, 200 EMA, 300 MA as "main gap focuses" i.e targets for upside/downside when trends lost

100 MA (Green dotted line)

200 EMA - Crucial in defining trend structure.

300 MA

These are not used for crossovers, unlike traditional lagging systems.

Instead, they define the structure and help identify

Whether the trend is respected.

If the system is entering a potential gap fill or trend loss zone.

Use Cases for Moving Averages

Trend Following

Focus on the 13 / 25 / 32 EMA to capitalize on ongoing trends.

Gap Fills

When the trend breaks, wide gaps may form between moving averages. These serve as

Targets (e.g., 100 MA to 200 EMA to 300 MA).

Triggers for short entries or repositioning.

EMA Compression

When EMAs flatten and converge, it signals market indecision or trend reset.

Watch for structure rather than exact values or order.

Practical Tools

A TradingView script is available in the 6th lesson of this Chapter to help you implement these indicators. The indicators have customizable values & there is a step-by-step guide provided to you in the lesson.