Significance of different moving average periods?

[SunTrader]

Less effective for decades now is more like it.

 

[murray t turtle]

I was wondering if anybody had come across some resources or books explaining the significance of the different and more popular moving average periods?

For example what is the significance of 20 days when we are using the 20 day moving average why not 22 days why not 30?

Or another example would be why the 200. Moving average, why not 220.

I figured there must be some science behind this and I wanted to delve into it a lot more.

Any help on this would be very much appreciated.


Thanks

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WHY not use 220 or 200 ma . Sure you could use a 40 inch yardstick; the standard is 36 inches. Back in the day we paid more comissions, you may have wanted to use 220, [ OK,,less comissions] but those days are gone now........................................................................................Wisdom is profitable to direct; on this= there is more than one right answer

 

[cornerstone]

I was wondering if anybody had come across some resources or books explaining the significance of the different and more popular moving average periods?

For example what is the significance of 20 days when we are using the 20 day moving average why not 22 days why not 30?

Or another example would be why the 200. Moving average, why not 220.

I figured there must be some science behind this and I wanted to delve into it a lot more.

Any help on this would be very much appreciated.


Thanks

I guess that certain MA's become more useful is because most of the traders- or the big players- use them. Yes, they are mathematically based, but the market behavior is a product made by humans. The logic is that one will not use something that doesn't correlate with the market. You can use the 220 sma but it will not reflect something useful.
If you really don't like the MA's you can use only the tape. Bookmap software will be great for that.

 

[SunTrader]

I've never encountered evidence that most traders or big players use MA's. Exactly the opposite - most newbies do and some traders/big players.

Though most academics use them to try in vain to prove the Random Walk nonsense Theory.

 

[cornerstone]

I've never encountered evidence that most traders or big players use MA's. Exactly the opposite - most newbies do and some traders/big players.

Though most academics use them to try in vain to prove the Random Walk nonsense Theory.

It's hard to find evidence to things in the market, but from observing and testing you can figure which MA's statistically has the more action around them

 

[SunTrader]

It's hard to find evidence to things in the market, but from observing and testing you can figure which MA's statistically has the more action around them

I didn't need to go to Stanford or MIT to know that statistically the shorter the MA the more action around them. Ah yup.

Note: the action around does not care whether there is a MA there or not. It's just a squiggly line. Now it if happens to also line up with actual support or resistance then it will give an appearance, a false one, that it had any meaning.

Though using a MA to have an idea on trend has some value, I suppose to some traders, who have trouble seeing the same just looking at price.

 

[Wheezooo]

A friend of mine once advised me. If your short, mid, and long term moving averages are all facing in the same direction, always trade in that direction. It is telling you that short, intermediate, and long term traders are all going the same way.

-Again, I'm not a directional trader, but I liked that. And he's an extremely respected trader.

 

[cornerstone]

I didn't need to go to Stanford or MIT to know that statistically the shorter the MA the more action around them. Ah yup.

Note: the action around does not care whether there is a MA there or not. It's just a squiggly line. Now it if happens to also line up with actual support or resistance then it will give an appearance, a false one, that it had any meaning.

Though using a MA to have an idea on trend has some value, I suppose to some traders, who have trouble seeing the same just looking at price.

the ability to look at price action and to figure from it is a great thing, but it requiers from the trader to sit by the computer and look at the tape, a thing that MA sometime can overcome

 

[SunTrader]

the ability to look at price action and to figure from it is a great thing, but it requiers from the trader to sit by the computer and look at the tape, a thing that MA sometime can overcome

Uhhh no.

 

[cornerstone]

Uhhh no.

one scenario, you are in a trade and want to know where to take profit, if you use price action you need to be near the computer to watch the tape to know when to take it, if you use MA you can put an order near it.
unless you use Bookmap and then you can see where the high liquidity of buyers/selles is