trading using moving averages

panzerman said:
I don't have to. MAs don't work, and you are not some 1:10,000,000 person who has figured out how to make them work.
More...

I will agree that MAs do not work as a predictive indicator in their own right, stand alone. They are the very definition of lagging indicators, which all indicators are. But combined with trader knowledge and a few other indicating bits, absent any news, they can help show what most markets are likely to do "most of the time".

In that vein, they have predictive power on the probability of their next move, based on the previous moves. But with that Angry Orange in office, I would not attempt it.

Hell, we are nearing cycle number 3 of the trade/Fed thing. Cycle 1 started on May 5th. Cycle 2 started on Aug 1st. Cycle 3, barring any shit fits from this shit face in the oval office, is going to be next Wed, the Fed rate decision. It will be very very sad if we get near the ATH next week, and then Trump twits some falderal about how unhappy he is with Powell, and we drop 5% from there. It is not that it is untradeable, it is just that it is getting so old. It almost all seems illegal. Is he really manipulating the economy for his own gain? The SEC should be investigating this by now.

The IRS nailed Al Capone on tax-evasion way-back-when. Time to put Orangeface under that same microscope.
 
padutrader said:
i will use the following moving averages

4 period exponential,9 period exponential, 50 period simple , 20 period simple , 100 period simple.

an entry will be considered when the shorter period exponential averages are 'far' from the other longer term averages AND if these longer term ones are also relatively flat showing the markets may be over extended in the short term.
More...
padutrader,

I understand fully what you are trying to do and that is : Use Price Action Entry methods to trade with the trend to increase your odds of sucessful winning trade.

Using EMA removes doubts and second guess personally

How do you plan to exit your trades?
 
padutrader said:
NO
i am using averages to determine the state of the market:is it trending or ranging.

i only have to check the relevant average to know what many time frames is doing....for example the 4 and 9 are in strong up trend whereas the 50 20 and 100 are flat ....

this is valuable information with less subjectivity as compared to using ONLY PA

this is all very personal
More...
padutrader,

You mentioned the key two words "Less subjectivity". EMAs offer less subjectivity and logical repeatable decisoin making.

Is your thought process to identify trend with EMAs and then use price action to enter and exit trades?
 
SimpleMeLike said:
padutrader,

You mentioned the key two words "Less subjectivity". EMAs offer less subjectivity and logical repeatable decisoin making.

Is your thought process to identify trend with EMAs and then use price action to enter and exit trades?
More...
use ma for context not necessarily trend
 
For those of you using EMAs, try using this formula as an alternative calculation to reduce the group delay of the filter:

alpha = 2/(N+1), where N is your lookback period

EMA = alpha*(price[0]+k*(price[0]-EMA[1]))+(1-alpha)*EMA[1]

where k is a gain factor you choose. I suggest values in the range 0.5 to 1.5. John Ehlers has the complete algorithm to dynamically adjust k. Lookup his zerolag filter.
 
i used the above to go long
the 4 ema is the white line.exit will be on the bar that breaks the low of the bar that closes below the 4 ema.
the context is not a strong down trend so not perfect but i used a bit of price action too to enter.
this worked alright but the probability was little less because the context was not perfect
a.png
 
You must log in or register to reply here.
Back
Top