HO LEE FOOK
What basic two things am I misunderstanding about moving averages?
- Thread starter marshg
- Start date
Did Ehlers make money in the market or he is just selling books? Do you know if there are any DSP engineers that made lots of money in the markets?
Neither he nor anyone else who admits to primarily using DSP for technical analysis have disclosed their records. Ehlers is very open about his methods and approaches trading with a solid science and engineering mind.
Of course that doesn't mean DSP, or TA in general, will make you or anyone else profitable.
You mean it only may make money to the authors of Technical Analysis indicators "with a solid science and engineering mind" but who do not disclose exhaustive analyses whether it works or not? Like a mathematician who demands the Nobel price without providing a proof for his conjectures? But then selling books and sticking it into the butt of unassuming new bees might not be the same as the Nobel price...
I haven't spent time looking at your charts and I think what I am about to say is no different than what Jtrades has already said, but maybe just another way of saying it, but here is how most charting software works. If your bars are say daily bars and the sma you have plotted is sma(10), it means the moving 10 day average is being plotted. If your bars are weekly (one per week), then sma(10) means the moving average being plotted is the 10 week average, and If you are plotting monthly bars, then sma(10) means that plotted average is based on the most recent 10 months, etc.. In other words the numbers in parentheses after 'sma' are relative to the time period of the chart. So if you wanted to plot a 10 day moving average on a monthly period chart where each bar represented the price change over a one month period, you would have to plot sma(.33) because 10 days is one third of a month. (assuming your software would allow it).
If using end-of-day data, the shortest period would be a two day cycle (0.5 Hz), which is the Nyquist frequency. Stay several octaves away from the Nyquist frequency because of noise. No shorter period than an eight day cycle (0.125 Hz). Anyhow, if desiring to use moving averages, use Ehlers Supersmoothers, which have just about the smallest lag of all lowpass filters.