Anyone use moving average indicators?
- Thread starter Saltynuts
- Start date
I use tick charts exclusively and use a short term EMA. However, I use the midpoint of each bar as the value used to calculate the EMA. Works very well for me. You just need to keep in mind that the only "real price" is the last traded price. Everything else are just "made-up" values
This was probably a good decision on your part in that your posts to my whims would have more than likely led to my assigning less weight to whatever you might have to say rather than more, indeed making it a waste of your time—which is what happened yesterday when I discovered that you made a comment on Thursday which communicated to me a lack of ability to recognize the similarity between moving averages of almost the same period.
But like you said to me on March 19, 2018...
I don't use tick charts, but using the midpoint of candlesticks when relying on one- and/or four-hour charts to help establish trend direction for day trading purposes (Forex) is something I too have used to counter the so-called problem cited by others that "all moving averages lag" (midpoint between the open and close—not between the high and low).
I find it necessary however to resort to other tactics or techniques to eliminate the lag factor when moving to lower time frames. Nonetheless, the idea that ALL moving averages lag is a perspective that I am likely to never share personally, though I probably won't ever attempt to argue against it objectively either (at least not in the future, if I ever did in the past, which I don't recall).
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That's interesting...I plan to trade the NSDQ, SP, and DOW for 10 days as part of a free trial I signed up for last week, and in setting up my charts, I realized that my (black) short-term trend line was essentially the same as the (crimson) 13-Period SMA (see image below).
But rather than using envelopes or Bollinger bands, I will be calling pullbacks using a Donchian channel.
%%
TRUE ;
they also lag in commissions, , bad fills, exspences, slippage , SEC fees. No wonder car makers put on a rear View mirror smaller than winshield. Even with ''free'' commissions i still like them; profits...………………………………………………………………………………………………………………………..NOT a prediction, lagging /delayed post
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I like to keep Bollinger Bands on my trading charts, and if I am buying into a trend I try not to buy when a stock is up near the upper band. I use 9EMA and 2 Std Deviation, and in an uptrend I like to see a stock running between the median and the upper limit for at least 5 candles, and I will be biased toward buying when it is down near the median and setting my stop below that median in the absence of very obvious support levels. Likewise, if I don't see it likely to keep trending, I will buy when it is near the upper line. Vice versa for a down trend and short position. The Bollingers are not my only criteria but they do impact my entries and exits quite a bit, when trend following.
I am not a big fan of using crossed averages for buy or sell indicators, as such. You are late into the game when you do that, usually. I do use 3 and 6 period Volume Weighted Moving Averages, in that manner, sometimes. If I look at a 1 minute chart and a 5 minute chart and they both agree, then I will sometimes go in or out accordingly to which average has just crossed upward over the other. If I see other indicators in conflict, all bets are off, but usually all the little things like candle and shadow height, volume, patterns, all agree with the crossed VWMA. Here is an example.
The red area is all at or below VWMA based on 6EMA. The light green is all area at or below VWMA based on 3EMA. When red appears, I don't buy, maybe I sell. When green appears, I don't sell. Maybe I buy. When I see the difference narrowing, I start paying close attention to shorter time frames and get a plan ready. The reason I put more faith in the VWMA crossing indicator is that volume is incorporated into it. EMA or SMA alone only tells a small part of what is happening or will happen in the near future. The black lines are Bollinger, 9EMA, 2 stddev. All together this makes for a pretty useful toolkit that does help me quantify trends of long or short duration, or better yet, of both.
As an example, I am looking for this stock to bottom out and make a strong move up, as it so often does. In the premarket Monday I will be watching this on a 5 minute chart. If the red gets narrow, and the Bollinger starts to level out, I will start switching back and forth between maybe 30 second and 5 minute and 30 minute charts. If they have all crossed over and I like the volume, and of course the stock is above the 9EMA center line, maybe I go in for a couple hundred shares with a stop a little below the centerline, target just below the last high of the week or month or even $5 or $10 amount though in practice I usually let it run as it will, and wing it on the exit, because it is not a big respecter of obvious or logical resistance levels. It was these tools that gave me my best ever win, with this very same stock.
So moving averages? Yeah, of course I use them. But not exclusively. They don't tell me what to do, only make suggestions.
I am not a big fan of using crossed averages for buy or sell indicators, as such. You are late into the game when you do that, usually. I do use 3 and 6 period Volume Weighted Moving Averages, in that manner, sometimes. If I look at a 1 minute chart and a 5 minute chart and they both agree, then I will sometimes go in or out accordingly to which average has just crossed upward over the other. If I see other indicators in conflict, all bets are off, but usually all the little things like candle and shadow height, volume, patterns, all agree with the crossed VWMA. Here is an example.
The red area is all at or below VWMA based on 6EMA. The light green is all area at or below VWMA based on 3EMA. When red appears, I don't buy, maybe I sell. When green appears, I don't sell. Maybe I buy. When I see the difference narrowing, I start paying close attention to shorter time frames and get a plan ready. The reason I put more faith in the VWMA crossing indicator is that volume is incorporated into it. EMA or SMA alone only tells a small part of what is happening or will happen in the near future. The black lines are Bollinger, 9EMA, 2 stddev. All together this makes for a pretty useful toolkit that does help me quantify trends of long or short duration, or better yet, of both.
As an example, I am looking for this stock to bottom out and make a strong move up, as it so often does. In the premarket Monday I will be watching this on a 5 minute chart. If the red gets narrow, and the Bollinger starts to level out, I will start switching back and forth between maybe 30 second and 5 minute and 30 minute charts. If they have all crossed over and I like the volume, and of course the stock is above the 9EMA center line, maybe I go in for a couple hundred shares with a stop a little below the centerline, target just below the last high of the week or month or even $5 or $10 amount though in practice I usually let it run as it will, and wing it on the exit, because it is not a big respecter of obvious or logical resistance levels. It was these tools that gave me my best ever win, with this very same stock.
So moving averages? Yeah, of course I use them. But not exclusively. They don't tell me what to do, only make suggestions.