Moving averages

[tomahawk]

Quote from IronFist:

Until you get to a choppy period.

It's easy to show a MA and a trendy section of chart and say they are profitable. Indicator vendors do it all the time to try and make their shitty systems look profitable.

Just saying.

No argument here. Simple backtesting will tell you whether historically there's any edge with whatever MA system is under consideration.

 

[BSAM]

Quote from tomahawk:

Sure they do ... just the opposite way.

That's not true Tommy.

 

[NoDoji]

Quote from spd:

I like looking for a retracement to the 21ema for counter-trend trades. Thats the only squiggly line I have anywhere on my intraday charts.

I also use the 20 EMA as the first profit target for counter-trend trades. Sometimes it breaks right thru, meaning the trend has likely reversed.

For getting in on a trend, I use the 20 EMA as the area to enter the trend. Short when price rallies to the falling MA and long when price falls to a rising MA.

As an example, today I shorted AMZN just before 1:15 p.m. when price hit the falling 20 EMA on my 3-min chart and resumed falling.

If you look at a 3-min AMZN chart for today, once the lower high was established at 11:54 a.m. price continued making new lows off every rally to the falling 20.

 

[spd]

Quote from NoDoji:

I also use the 20 EMA as the first profit target for counter-trend trades. Sometimes it breaks right thru, meaning the trend has likely reversed.

Thats pretty much the way I play it as well. If price breaks through with some conviction I'll keep some breathing room in my stop and let it ride, but if it just bounces and bumbles around anywhere in that area im out and looking for my next entry signal. Like I mentioned in my first post, for me the moving average is an AREA of interest, not hard line in the sand. I think of trendlines and S/R levels the exact same way. I just like to see what price does in those certain regions of interest, not what price does at some specific tick.

 

[buy fruit]

Quote from bmwhendrix:

Why do you need to predict?

We just follow it.

 

[buy fruit]

Quote from CollegeTrader:

Do you trade with moving averages. lately ive been going with out just pure PA and TA just want to see what other traders are doing.

I know that some people use it, but the long investment cycle.

 

[athlonmank8]

Quote from nazzdack:

1) Do you attend Ohio State or Penn State?
2) Moving averages work "well" in a trending market, not so in a sideways market. They are a lagging indicator at best.

They're widely used though.

 

[athlonmank8]

Quote from IronFist:

Until you get to a choppy period.

It's easy to show a MA and a trendy section of chart and say they are profitable. Indicator vendors do it all the time to try and make their shitty systems look profitable.

Just saying.

That's what stops are for.

 

[tomahawk]

Quote from BSAM:

That's not true Tommy.

I will respectfully disagree.

 

[tomahawk]

Any (ex-)floor traders care to weigh in on the MA argument? I notice whenever you see on the floor at one of the exchanges a monitor showing a chart, there's always at least one MA plotted, unless that's VWAP or something else.