Should we use the 200 day EMA or SMA?

Turveyd · May 25, 2020

qlai said:
This sounds very familiar If you treat MA as an area, not a line, would EMA vs. SMA make much difference on intra-day charts?

I use Envelopes to give SMA's / EMA's a Width.

maxinger · May 25, 2020

maxinger said:
decades ago, I started with hundreds of indicators and various MAs.
so many till I can hardly see the candlesticks.

Now I have zero except candlesticks.

great. I am the only one using no indicators at all.

qlai · May 25, 2020

maxinger said:
great. I am the only one using no indicators at all.

Volume is an indicator, no?

maxinger · May 25, 2020

qlai said:
Volume is an indicator, no?

most people use time based candle sticks (eg 1 min chart, 5 mins chart, 15 mins chart ...)

my charts are volume based candle sticks (eg 1k contracts = 1 candle, 3K contracts = 1 candle, 9K contracts = 1 candle ....).

so in that sense, I do consider volume as something very important.

tommcginnis · May 25, 2020

Tradex said:
Pragmatic-Trader, read "Trend Following: How Great Traders Make Millions in Up or Down Markets" by Michael Covel, another best seller, it will show you how trend following beats buy and HOPE, by a large margin, while still reducing the drawdown.

I don't recall Covel's book to carry so much as a single algebraic equation. == Total fluff.
Takes 300+ pages to say "great traders make millions in up or down markets."
I recall (bitterly) reading the entire thing in a weekend road trip, 5.5 hours each way, tucked into the back of a car and unable to escape. It was either read Covell or go to studying candy wrappers and tourist brochures from the floor and seat pockets. == Not recommended.

old coot · May 25, 2020

The 200 day moving average on the S&P500 has been completely irrelevant for the last 3 months, but may show up tomorrow. 3 months wrong vs (possibly) the next few days relevant. I wouldn't bet on those odds. There is some argument you could make that the 200 day moving average was relevant from 2/27 to 3/5, and there was a pause there for those days, BUT the index had already fallen 340 points by then. I wouldn't want to be holding long for a 340 point drop because it was still above the 200 day moving average, regardless if it was a SMA or EMA. And I would not care to have held a short position from 2200 until now because it was below the 200 day moving average. Any indicator that you're using for entries or exits needs to be relevant to the price action, and 200 days is forever in today's world.

Tradex · May 25, 2020

tommcginnis said:
I don't recall Covel's book to carry so much as a single algebraic equation. == Total fluff.

??

Michael Covel provides REAL proof, REAL data, REAL results and decades of actual performance charts from professional money managers that show that simple trend-following techniques work.

Most hedge funds and mutual funds hate the guy because he basically shows the average trader that he does not need them.

Fx-Game · May 25, 2020

I wait for 200 ma (...) crosses, to decide whether to scalp, do nothing or scalp + swing.

I think that is the best method for me this far ;

Tradex · May 25, 2020

Here are the major moving averages:

SMA (Simple Moving Average)
EMA (Exponential Moving Average)
DMA (Double exponential moving average)
TMA (Triple exponential moving average)
LWMA (Linear Weighted Moving Average)
SMM (Simple Moving Median)
SMMA (Smoothed Moving Average)
HMA (Hull Moving Average)
NoLagMa (No Lag Moving Average)
KAMA (Kaufman Adaptive Moving Average)
PPMA (Pivot Point Moving Average)
TRMA (Triangular Moving Average)
WMA (Wilders Moving Average)
FAMA (Fractal Adaptive Moving Average)
VIDYA (Variable Index Dynamic Average)
LSMA (Least Squares Moving Average)
DMA (Displaced Moving Average)

Blah... blah... blah... blah...

Guys, don't get carried away with all these moving averages, they ALL tell the same story! Just stick with the one you like best ( a simple moving average will do) and you will be fine, trust me on this one.

Slope Trader · May 25, 2020

Tradex said:
Put an exponential moving average on any chart and see how it changes after each bar.
It is a repaint indicator, I have lost a great deal of money with that sucker, that's why I only use simple moving averages.

I am just sharing my experience folks, trade as you see fit.

Hi Tradex,

I know there are indicators that repaint and the ZigZag and Linear Regression Channel indicators and a few others like them are infamous for doing it.

However, basic moving averages like the SMA, EMA, or WMA don't repaint. Once a price bar closes in a particular time frame and the MA has set its location, it will never change for that bar.

If you are seeing actual repainting like e.g., the ZigZag indicator does, this might be an indication that your charting software has a glitch.