SMAs - what are they good for

[Frederick Foresight]

This is why I hated indicators like MA with infinite settings. I mean why 50 ma not 45? why 200 not 180?

Then you have the smart guys using 13..like wtf. 13?!?!

You're looking for the One Right Way. (Good luck with that.) As I see it, MAs are not very useful on their own without an underlying context/method. And that context can help determine the MA values that serve it well. I can't imagine that MAs alone can be used as entry/exit triggers for profitable trading. It's not that simple.

Again, I personally just use them as a reference and not as a trade generator. I can trade without them just as I can drive without a dividing line in the middle of the road. But it's nice to have them.

 

[Frederick Foresight]

Of course, the most important thing about MAs are their color and thickness. Also, dotted lines vs. solid. So many choices! What to do?

 

[TrAndy2022]

SMA is the poor mans moving average, better to use Kalman Filters.

 

[SunTrader]

Any MA is the poor man's version versus price itself!!!!!!!!!!!!!

 

[Handle123]

If a trader is waiting for crossovers, that never tested out well for me. What has worked is slope of a SMA then wait for retracement. If doing dailies, check out last five years and find the "mean" average of retracement and place limit order to enter. Same goes with risk.

Normally when SMA's goes flat is often trend reverse.

 

[Slope Trader]

If a trader is waiting for crossovers, that never tested out well for me. What has worked is slope of a SMA then wait for retracement. If doing dailies, check out last five years and find the "mean" average of retracement and place limit order to enter. Same goes with risk.

This approach works well with EMAs too.

 

[farmerjohn1324]

Folks here asking for "setups"
How does a successful trader to that?
Here's a siimple one
Simple Moving Averages

Loads of good tutorials on TA.
I use Stockcharts.com.
Huge documentation.
And here's why people use SMAs
(loads of smart TA folks here as well)

SMA TA rules:
The 50 SMA must be above the 200 SMA
And the prices need to be above the 50 SMA
Not happening with SPX


View attachment 302523

$NDX getting ready to "crater"
(should be 200 SMA, not 200 SDA)

View attachment 302524

Here's a good looking chart:
(and certainly not good to be long most stocks here)
50 above the 200
AND prices over the 50

View attachment 302525

Here's a decent one, but I wouldn't want this as a long:

View attachment 302526

Here's the best 2 for me, best charts
Prices on top, then the 50 then the 200
(of course others here have all kinds of favorites)

View attachment 302527

View attachment 302528

Can you give more explanation of why you think some look better than others? Assuming they have price, 50, 200, in that order... What is it that makes one preferable to another?