Moving Averages-simple or exponential

[TG]

Have changed my moving averages from one to other lots of times, mainly based on comments from trading sites I respect. Just curious if others have gone through similar experience and what results have been. My own tend to favor exponential, but not a decisive edge. My trading tends to be intraday with a few swings.

 

[Magna]

For the most part, and for all practical purposes, it doesn't matter. What does matter is that, whichever you choose, you live with it day in and day out, get used to all it's rhythms and nuances.... and don't flip back 'n forth.

 

[Ditch]

IMO a SMA is as good as anything else.

 

[Pabst]

Quote from Magna:

For the most part, and for all practical purposes, it doesn't matter. What does matter is that, whichever you choose, you live with it day in and day out, get used to all it's rhythms and nuances.... and don't flip back 'n forth.

I agree with Magna. In fact an 8 period ema often looks like a 5sma. or a 34ema like a 21sma, ect. Use what you empirically observe is working, while being mindful of a particular key number that the mkt. seems fixated on i.e. a 50 day sma.

 

[stokhack]

Magna is right, most depends on what is used to generate your signal. I find that the EMA works better for the short term MA and the SMA for the trend. Problem with MA crossovers is you will get whipsaw a lot on choppy days, so you need to find a confirmation signal before taking trade on crossover.

 

[Neil]

Quote from stokhack:

I find that the EMA works better for the short term MA and the SMA for the trend. Problem with MA crossovers is you will get whipsaw a lot on choppy days, so you need to find a confirmation signal before taking trade on crossover.

I have been working with weighted ma's lately and find that for my purposes they seem a bit steadier than the others... agree that a confirmation signal is important if using crossovers..

Neil

 

[cgr8deals]

If you use moving average crossovers for signal generation, simple and exponential work equally well at creating losses

 

[plumlazy]

Quote from cgr8deals:

If you use moving average crossovers for signal generation, simple and exponential work equally well at creating losses

Then it might be helpful to be aware of a higher timeframe. ie: Say your'e playing the five minute for an entry - check to see if the 10 or fifteen minute chart's ma's are in agreement with the entry on the five minute.

 

[NihabaAshi]

Quote from cgr8deals:

If you use moving average crossovers for signal generation, simple and exponential work equally well at creating losses

The high probability trade signals...those with less risk and more rewards...

occurs after the crossover.

Thus, placing a trade position at the time of the crossover itself is high risk unless other key market vehicles are doing something similar.

I know a lot of traders that go broke trading (consistently) the crossover itself...

I know a lot of traders that profit consistently via using the crossover as a signal to look for other profitable situations that occurs soon after the crossover.

Simply...I think crossovers are suited more as signals to watch out for something else instead of as entries.

NihabaAshi

 

[Neil]

Quote from NihabaAshi:

I know a lot of traders that go broke trading (consistently) the crossover itself...

I know a lot of traders that profit consistently via using the crossover as a signal to look for other profitable situations that occurs soon after the crossover.

Simply...I think crossovers are suited more as signals to watch out for something else instead of as entries.

NihabaAshi

Hi Nihaba,
Are you.. and others here.. referring to 'price' crossovers of ma's or ma crossover ma? Just seems to me that price crossovers are giving signals way too often while working on different time frames and selection of ma's to use.. as this thread is about... ie simple, exponential or weighted... can produce vastly different results from the same situations..

and again, with a compatable secondary signal to further filter down the signals to act upon..

Neil