Distance from MA

Quote from lilduckling:

dear sir....i just shorted LXK earlier this morning @ 69.53
look at the MAs on the 5min and 60min charts and you tell me what effect they had on the price... even 200ma had little effect.
Yes there is a reason behind this play....but my point is...dont rely on MAs to effect price.
My little brain does look at MAs...but only with lots of other factors in play....MAs only small consideration...Support/ressistance have more bearing imo.

New traders looking at this play on the hourly chart may be tempted to go long when price was at 20 ma...since hourly chart looked so good....they wouldve been down .80 by now.

Look at the DAILY 10 period MA of LXK and you will have made my point.
 
Hmmm ... normalized distance from a moving average?
How about the EMA distance for, say, GE stock?

ema-deviation.gif


Interesting, eh?
 
Quote from gummy:

Hmmm ... normalized distance from a moving average?
How about the EMA distance for, say, GE stock?


Interesting, eh?

Nice chart. That's a good way to look at it.
 
Quote from gummy:

Hmmm ... normalized distance from a moving average?
How about the EMA distance for, say, GE stock?

ema-deviation.gif


Interesting, eh?

Nice work. I like the way you think. What software did you use?
 
P.S.
Intrigued by the original post on this thread [color=777777](and loving them thar coloured things)[/color], I got me a fun spreadsheet, described here.

It's great entertainment ... try it :D
 
Concept of measuring price deviation around MA is typically the concept of CCI indicator.

A full study about this topic in Mark Helweg's book, Dynamic trading indicators

Hani :)
 
Distance from moving average?

Isn't that the "indicator" that Steve Nison talks about in one of his books? I think it was called the disparity index and was supposedley used a lot by the Japenese.

United:confused:
 
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