Thank you for purchasing an indicator or bundle from Kenzing®. This brief introduction contains instructions on how the indicator functions and how to adjust the input values that allow you to personalise the indicator according to your trading strategy. Information on how to access the indicator after purchase is not included in this document and can be found in the Read Me FAQ document.
Understanding the Crypto-Adjusted Exponential Moving Average
This exponential moving average can be adjusted to give weight to the performance of the six largest cryptocurrencies by market-cap. Each of the six cryptocurrencies in this Crypto-Index are weighted equally.
- Bitcoin (BTC)
- Ethereum (ETH)
- Bitcoin Cash (BCH)
- Ripple (XRP)
- Litecoin (LTC)
- Nem Coin (XEM)
The use of this indicator is to observe the deviation between the price of the underlying asset that is the basis of your chart, and the rest of the cryptocurrency market that is represented by the Crypto-Index.
The exponential moving average (EMA) is a common preference among traders as it puts an increased value on recent prices. As a result, the EMA is more reactive and volatile than a simple moving average. In an EMA, weighting factors decrease exponentially and are calculated using this formula:
Y = period
alpha = 2 / (y +1)
EMA = alpha * x + (1 – alpha) * EMA