Are there any moving average systems that don't involve picking a time period?
- Thread starter CyJackX
- Start date
Yes, by just price for period 1. Use that. It works (in context.)
Yes.
There are moving-average-based systems in which the periodicity is determined by numbers of transactions instead of by time, and the charts for those are constructed by applying moving averages, of whatever type, to tick charts.
There are also moving-average-based systems in which the periodicity is determined by volumes transacted, and the charts for those are constructed by applying moving averages, of whatever type, to charts displaying constant-volume bars. My own guess is that this type should be a little more reliable, if anything, overall.
Spot on
Without a period, it wouldn't be a moving average anymore. However, how you choose to average is entirely up to you (which maybe is part of the problem - but also endless possibilities).
This is perfectly true, of course, in that without somehow quantifying the periodicity, there isn't a defined set of numbers from which an average can be calculated.
But the period doesn't necessarily have to be a time period.
It can be a period of bars formed according to non-temporal parameters (such as "numbers of transactions" as seen on tick charts, or "volumes transacted" as seen on constant-volume charts).
True, but the question would still remain: How far back--in time--would one go to count "a period of bars formed according to non-temporal parameters?"
If the parameters be truly non-temporal, will they ever change? (Sorry, watched too much Star Trek in my time!
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Sorry to seem contradictory, but it honestly doesn't: in the case of tick-charts it's "How far back in numbers of transactions would we go ...", and in the case of constant-volume charts it's "How far back in volumes transacted would we go ..." - not time parameters. And this is rather the point, as well as an answer to the OP's question.
Apologies if I sound pedantic about something that may sound to some like rather a technical distinction, but it's actually hugely significant to futures traders using these charting methods.
Moving averages are not a predictive indicator. However, they have great usefulness in smoothing a time series to identify historical trends. Here is a link to one of the better discussions of moving averages that I have found, for your enjoyment:
http://www.jurikres.com/faq1/faq_ama.htm
http://www.jurikres.com/faq1/faq_ama.htm