DAY TRADING FOR BEGINNERS
Moving Averages 9, and 20 EMA
Written By Will Bell 28 Year Retail Trader
Key Takeaways
🔑 The 9 EMA reacts faster.
🧠 Crossovers are context, not commands.
Moving Averages: How Traders Use the 9 EMA and 20 EMA
🟠 Pull up enough trading charts and sooner or later you are going to see lines running through the candles. Sometimes there are two.
Sometimes there are six.
Pull up enough trading charts and sooner or later you are going to see lines running through the candles. Sometimes there are two.
Sometimes there are six.
One trader has a 9 EMA. Another has a 20 EMA. Somebody else has filled the screen with so many indicators that you can barely see the stock underneath them. It does not need to be that complicated.
The 9 EMA and 20 EMA can give traders a fairly simple way to look at short-term trend, momentum, and how price is behaving relative to its recent history.
But the lines themselves are not the interesting part. What matters is what price is doing around them.
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Is the stock trending?
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Is it pulling back?
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Are buyers repeatedly stepping in near the averages?
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Has momentum started weakening?
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Is the stock chopping through both lines every few candles?
Those questions are more useful than blindly buying because one line crossed another. That is the first thing I would understand about moving averages. They are there to help organize price. They are not there to tell you the future.
What is an EMA?
EMA stands for Exponential Moving Average. A moving average takes recent price information and turns it into a smoother line on the chart.
🟠 Instead of reacting to every little candle individually, you get a running view of where price has generally been trading.
The exponential part means more recent prices receive greater weight in the calculation. That makes an EMA more responsive to new price movement than a simple moving average using the same number of periods.
For traders watching fast markets, that quicker response is one reason EMAs are so popular. But there is an important detail beginners sometimes miss. The number does not necessarily mean days.
A 9 EMA on a five-minute chart is based on nine five-minute bars. A 9 EMA on a daily chart is based on nine daily bars.
Change the chart timeframe and you change the information the moving average is measuring. Same indicator.
Different market perspective.
That matters. ⬅️
Why traders put the 9 EMA and 20 EMA together
The two lines move at different speeds. The 9 EMA reacts more quickly because it is based on fewer periods. The 20 EMA is slower.
That creates a useful relationship. When a stock starts accelerating, the 9 EMA will generally respond before the 20 EMA.
If the trend continues, the faster line may remain above the slower line while price keeps pushing higher.
When momentum begins weakening, that relationship may start changing. The lines flatten. Price begins crossing them more often. The 9 EMA may move toward the 20 EMA. Sometimes it crosses underneath. This is why traders watch the pair.
You are essentially comparing a faster view of recent price action with a slightly slower one. The important part is not memorizing which line is on top.
It is understanding what that relationship says about the character of the move.
Imagine a stock that starts trending after the open
🟠 Suppose a stock opens around $6.20. News brought unusual volume into it before the bell, and buyers continue showing up after the regular session begins.
The stock moves to $6.50. Then $6.80. Then $7.10.
During that move, the 9 EMA begins rising quickly. The 20 EMA rises too, but more slowly. Price pulls back.
Instead of completely falling apart, the stock settles near the 9 EMA, buyers come back, and it begins pushing higher again. That can tell you something.
The stock is not simply going straight up. It is pulling back while maintaining a fairly strong short-term trend.
Later, perhaps the pullback becomes deeper and reaches the 20 EMA. Again, buyers appear.
That may tell you the trend is still intact, but the stock now needs more room than it did earlier.
Notice what we are doing here. We are not saying: “Price touched the 9 EMA. Buy.” We are watching how price behaves around the moving averages while considering the trend already underway.
That is a much better use of the indicators.
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The 9 EMA usually stays closer to price
Because the 9 EMA responds faster, it often hugs price more closely during a strong move. That can make it useful for seeing short-term momentum.
A stock that keeps pushing higher while repeatedly holding around a rising 9 EMA may be showing strong immediate demand.
But that does not mean the 9 EMA will hold forever. Sometimes traders become so accustomed to seeing a stock bounce near the line that they begin treating it like concrete support.
Then one candle cuts straight through it. Nothing broke in the indicator. The market simply changed. The 9 EMA was showing what price had been doing recently. It never promised that buyers would defend the line on the next pullback.
The 20 EMA gives the move more room
🟠 The 20 EMA responds more slowly. That means price can move around more without immediately dragging the line with it.
In a strong trend, a stock might lose the 9 EMA temporarily and still remain above the 20 EMA. That can be useful context.
Maybe the momentum cooled. Maybe profit-taking came in. Maybe the stock needed a deeper pullback. The move does not automatically become bearish because one fast average was lost.
This is why watching the relationship between both averages can sometimes give a cleaner picture than watching either line by itself.
The 9 EMA may show the immediate momentum. The 20 EMA can help show whether the broader short-term structure is still holding together.
A pullback into the averages can look very different depending on how it gets there. This part matters. Imagine a stock gradually pulling back toward the 9 EMA on decreasing volume.
The candles get smaller. Selling seems controlled. Then buyers begin appearing near the line. That is one kind of situation.
Now imagine another stock crashes through the 9 EMA on heavy selling volume, cuts through the 20 EMA seconds later, and continues lower.
Same two moving averages. Completely different price action.
That is why traders get into trouble when they reduce technical analysis to: “Stock touched moving average.”
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How did it get there?
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What was volume doing?
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Was the broader move strong or already exhausted?
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Did buyers actually react?
Those details matter more than the touch itself.
Traders talk about moving averages as support and resistance, but be careful with the wording
You may hear traders call the 9 EMA or 20 EMA dynamic support when price is above them. Dynamic simply means the level changes over time rather than sitting at one fixed price.
If the stock trends higher, the moving averages can rise underneath it.
During a downtrend, they can move lower above price and sometimes appear to act like resistance. The concept is useful. But again, the moving average is not physically supporting anything.
What matters is that enough traders may be watching similar areas, while the average itself reflects where recent prices have been. If buyers step in repeatedly near a rising EMA, the area becomes meaningful because of the price behavior.
Not because the indicator has some invisible force around it.
What does a 9 EMA crossing above the 20 EMA mean?
This gets a lot of attention. When the faster 9 EMA crosses above the slower 20 EMA, traders sometimes call it a bullish crossover.
🟠 It tells you recent price action has become strong enough to push the faster average above the slower one. That can happen during the early stages of a trend.
It can also happen late.
That is the problem with relying on crossovers alone. Moving averages are calculated from price that has already happened. They lag. By the time the crossover appears, the stock may already have made a substantial move.
So a 9-over-20 crossover can be useful confirmation that momentum changed. It is not necessarily the ideal moment to enter.
Sometimes the crossover occurs after the cleaner entry was already available.
The opposite crossover has the same limitation
When the 9 EMA crosses below the 20 EMA, traders may interpret that as weakening momentum. Maybe the stock is rolling over. Maybe a trend is reversing.
Or maybe the stock is simply chopping sideways and the lines are crossing because there is no meaningful trend at all.
This is where crossover strategies get beat up. In a clean trend, moving averages can look wonderful. In a sideways market, they can become a mess. Price crosses the 9. Then the 20. Then back over both.
The averages cross each other. Then cross back again.
If you react to every signal, you can spend the entire session getting chopped into pieces.
Flat moving averages can tell you something important
Sometimes the most useful information is that neither average is really going anywhere.
The 9 EMA is flat.
The 20 EMA is flat.
Price keeps crossing both. That is often a clue that the stock lacks a strong directional trend. This does not mean nothing can happen next.
A breakout may eventually develop. But at that moment, the market is telling you something different from a stock with both averages rising sharply underneath price. This is why the slope of the averages matters.
A rising 9 and rising 20 during a trend provide different context than two lines running sideways through the middle of choppy candles. You do not need another indicator to recognize that difference.
Sometimes the moving averages are already showing it.
Separation between the averages can show momentum, but it can also show extension
During a strong move, the 9 EMA may pull farther away from the 20 EMA. That can happen because recent prices are moving quickly enough that the faster average cannot wait for the slower one.
➡️ At first, this may reflect strong momentum. But if price becomes extremely stretched above both lines, chasing the stock can become increasingly risky.
Strong trends can stay extended. There is no rule saying price has to return to an EMA immediately.
🟠 Still, when a stock is far above both averages after a sharp run, the entry is different from one taken near the developing trend.
The farther price has traveled, the more important it becomes to think about where the trade is wrong and how much room the stock may need. The moving averages can help you see that visually.
Moving averages can help with trend without predicting the top
This is one of their better uses. Suppose a stock has spent most of the morning above a rising 9 EMA and 20 EMA.
The 9 remains above the 20. Price keeps making higher highs and higher lows. That gives you a fairly clear picture of the session.
The stock is trending. You do not need to know where the exact top will be. In fact, trying to predict the exact top may cause you to fight a trend that is still working.
Moving averages can help keep the trader focused on what price is doing instead of what the trader believes it should do. That distinction can save a lot of unnecessary trades.
They can also help show when the character starts changing
Imagine the same stock later in the session. Price loses the 9 EMA. The bounce is weak. Then the stock trades below the 20 EMA.
Both averages begin flattening. The 9 crosses under the 20. None of those observations guarantees the trend is finished. But taken together, they tell you the session no longer looks the way it did an hour earlier.
That is useful. Technical analysis does not always need to tell you: “Buy here.”
Sometimes its best job is telling you: “Something changed.”
Then you decide what that change means for your trade.
The timeframe can completely change what the EMAs look like
This is another area where people become confused. A stock can look strong on a one-minute chart and weak on a fifteen-minute chart. Why?
Because each timeframe is measuring a different slice of price behavior. The 9 EMA on a one-minute chart represents nine one-minute periods. On a five-minute chart, it represents nine five-minute periods.
Those are not the same market view. This is why copying somebody else's indicator settings without understanding their timeframe can be useless.
A day trader working from five-minute candles and someone trading off daily charts may both say they use the 9 EMA. They are looking at completely different information.
The settings only make sense inside the trading process using them.
The 9 and 20 EMAs work better with price structure
Suppose a stock pulls back toward the 20 EMA. There is also prior resistance in the same area that the stock broke earlier. Now that former resistance appears to be acting as support.
Volume has slowed during the pullback. The stock is still above VWAP.
That situation contains more information than:
“Stock touched 20 EMA.” Several pieces of the chart are lining up. This is generally where technical tools become more useful. Moving averages should support the analysis. They should not be the analysis.
Small-cap traders need to respect how quickly the lines can become irrelevant
Small-cap momentum can move fast enough that a beautiful EMA setup turns ugly in seconds.
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News changes.
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Liquidity disappears.
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A low-float stock reverses.
Suddenly price slices through both moving averages before the trader has much time to react. This is why the 9 EMA and 20 EMA cannot replace risk control. A line on a chart does not guarantee an exit.
It does not guarantee liquidity. It does not prevent a halt, gap, or violent reversal.
Especially in small-caps, the moving averages need to stay inside a larger process that includes volume, liquidity, catalyst, and position size.
Large-cap traders may see cleaner EMA behavior
In more liquid stocks, price can sometimes interact with moving averages in a more orderly fashion. The spreads may be tighter. The market may have more depth. Institutions may be active.
That can make pullbacks and trend structure easier to read. But cleaner does not mean predictable. Large-caps fail moving averages too.
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They gap.
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They reverse.
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They respond to news.
The tool is still only describing the market. It is not controlling it.
Do not add more moving averages just because two were useful
This happens constantly. The trader starts with the 9 and 20.
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Then adds the 50.
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Then the 100.
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Then the 200.
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Then another color.
Soon there are so many lines that any price movement can be explained by whichever average happened to be nearby. At some point, more information becomes less clarity.
If the 9 EMA and 20 EMA already help you read the short-term trend, there may be no reason to clutter the chart further unless another average has a specific job inside your strategy. Indicators should answer questions.
They should not decorate the chart.
A simple way to read the 9 and 20 together
I would pay attention to a few things.
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Is price above or below both averages?
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Are the lines rising, falling, or flat?
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Is the 9 EMA above or below the 20 EMA?
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Are the averages separated or tangled together?
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What happens when price pulls back toward them?
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What does volume look like during that pullback?
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Does another important level sit nearby?
That gives you quite a bit of information without turning the chart into a cockpit. You are not trying to predict every candle. You are trying to understand the structure of the move you are already looking at.
The moving averages should make the chart easier to understand
That is probably the best standard. If the 9 EMA and 20 EMA help you recognize trend, pullbacks, momentum changes, and areas worth watching, they are doing their job.
If they make you feel like every crossover has to be traded, they are probably doing too much. The market comes first. The indicator comes second. Price creates the moving average. The moving average does not create price.
Once you keep that relationship straight, the 9 EMA and 20 EMA become much more useful. Not because they tell you exactly what the stock will do next.
Because they can help you see more clearly what the stock has been doing already.
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