Simply put, the example from above shows this variation of the “Simple/Exponential Cross”. If you are used to using MA crossovers by combining MAs of different (but close) values then you could simply switch to using a couple of S/EMAs of the same value. It will yield similar results and you’ll find that they are nicely sensitive. The smaller the period the more sensitive will be the crossovers thus more quickly showing small changes in the trend (i.e. fibonacci swings & minor retracements), and the larger the period the less sensitive (to market bouncing fluctuations) will be the crossover thus showing you the prevailing trend. Traditional MA crossovers, as well as the basic S.E.X. technique is usefull to the trader to show trends in the market and to signal changes in market direction. Though some traders employ trading strategies that they enter/exit the market whenever their lines cross (I’ve met some traders that basically use just this technique profitably) I wouldn’t recommend it. The primary purpose of watching MA crossovers, and of course S.E.X. crosses is to help you to make trading decisions in conjunction with other technical analysis tools. THEY ARE NOT MEANT TO BE USED ALONE. What periods should you use? Feel free to play around & test using whatever period you want, however the periods I use & why are explained below. One more note here – you may notice that a pair of S.E.X. lines has similar properties to MACD (Moving Average Convergence Divergence). Though they share some commonalities they still behave a bit differently, and more importantly because S.E.X. lines are superimposed over your charts it helps to more clearly see, visually, certain indications that wouldn’t be as apparent by just using MACD. Loosely defined, S.E.X. lines combine some of the elements of MACD and MA crossovers, yet they have their own properties altogether.
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