The 10 WEMA and 30 WEMA are not averages etched in stone. These can just be a couple of parameters to objectively view momentum in a chart. Usually charts in strong near term uptrend take support at region of 10 WEMA and those in medium term momentum take support in region of 30 WEMA.
Different people use it differently. Some trend following traders use a 10 WEMA to keep adding to their positions on the way up, and sell the spikes seen in strong momentum stocks. Others use it as a mental stop loss wherein if a stock conclusively breaches 10 WEMA then they plan exits.
There are no fixed rules for using these moving averages. Personally I tend to go down one time frame lower on daily charts and see if there are any signs of near term weakness in strongly trending stocks.
Idea should be to start having atleast a system to follow and then see if it works and try to get better at it. At the end of all the exercise after a few months/quarters/years, idea should be to land up with a system that works for us and is easy to implement. It need not be based on moving avgs also. Can be just price patterns with volumes, broad formations like rounding bottoms, cup and handles, flags etc. It’s a constant march towards something close to a holy grail.
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