To put more money in the trading account?
What is better: using a simple moving average or price action?
- Thread starter padutrader
- Start date
not everyone has your needs
It's a bit hard to tell as it is not indicated which lines are the MA's and which MA are they and HOW you are using these MA's. But aside from all, WHAT are you trying to prove? That MA and PA can be indicating the same thing? Nobody has questioned that but I am just stating what MA and PA's TEND to show.
And nobody is questioning the usefulness of MA's but they are NOT foolproof nor are they 100% reliable. And trust me, I have used many different kinds of MA's and combinations of them even in my trading career. And since they are moving averages which are plotted AFTER PA has happened, so they will ALWAYS be lagging, i.e. confirming something that has already happened. From how they have shown on the charts in relation to PA, yes one can deduce where PA is likely going in the future. But they do come with their own caveat. The MA's with shorter period parameter will be more prone to whipshaws which won't be useful if one's using a trend-following system and the ones with longer period parameter will be lagging after the PA more so it can't be used in a range-trading system.
LOL
First, they don't have to be mutually exclusive, and many people use both.
Secondly, please excuse my mentioning that it's rather a vague question, without any description or definition of how one would be using MA's (the most obviously striking example is that there's a world of difference between using them in order to determine the presence or absence of "trend" for directional bias purposes, and using them to determine trade entries/exits).
It's an objective fact (for what that's worth, if anything) that some successful, professional traders use moving averages, while others don't.
And it's a subjective one (i.e. "in my experience") that all the successful, professional traders I've ever known myself, who are using moving averages (and/or other indicators derived from them), are using them in conjunction with price action understanding and techniques.
And it's an impression (i.e. "I think it's true but I can neither swear to it nor - obviously - prove it") that nobody who's trading for a living is using MA's while not using price action at all. I offer this one hesitantly, because we're not defining "price action", but I really find it a real stretch to envisage any definition or description of the term which would make what I've said inaccurate.
My point is that it doesn't really matter which is "better": market realities predicate that nobody's making a living without at least some understanding of price action, whether they're using moving averages or not.
nice reply did not make fun of me gave your ideas and explained everything well
thanks for the explanation. i know how much effort it takes to post something.
it is not bad to get confirmation so the lag maybe an advantage.
i have used 3 8,20,50,100,200.
i enter when the 3 8 ,20 are in downtrend and all the other are in uptrend.
i enter when market drops below all the moving averages
i am not trying to prove that moving average and price action are indicating the same thing.
i do not need to prove that because both are based on price so how can they indicate anything different.
there are whipsaws in price action also that is why many traders do not use 5 min 1 min
I know most traders will not agree with this;so let us agree to disagree on this
Cheers enjoy your trading and i am happy to take part in this discussion;if you would like to point out anything else please do not hesitate to tell me.
Nothing is foolproof in trading because of the nature of the game: you cannot play this game alone,you always need someone to take the other side of the transaction.
Way to in depth for a forum format. This is all s and giggles.
There are more vendors marketing mechanical trading systems, black box systems, robotic trading sytems or magic pill when the system is just based upon some indicator (price moving averages are an indicator out of hundreds or thousands). That's the reason why many navigate towards such because there's nothing to learn beyond how turn it on/off, parameters for them and chart configurations for the indicator.
Just as important, there are more charting programs with "default indicators" for anyone to plot. Take a look at your own charts you've been posting here at Elitetrader.com on the left side...you have things called Oscillators, Volumes, Bill Williams, Alligator, ATR, MACD and many many more.
In fact, without the indicators...most charting companies will go out of business except for the top tier businesses like Reuters, Thomson, Bloomberg that have other products very profitable outside of their charting programs.
Plenty of ambiguity and judgment...which indicator to use in what type of indicator out of hundreds, type of price action suitable for the indicator, trade management after entry, position size management and many other variables.
Simply, don't be naive about indicators as if the charting programs, brokers, authors, system sellers are not using them to lure in clients because they are using them to lure in clients under themes like "bells & whistles".
wrbtrader
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Moving averages can make you look like a genius in high volatility trading environments like we are in now. Rewind back to 2016, and you would not have faired as good from an intraday perspective.
Nothing beats a solid understanding of price structure. Add a moving average in to give you an “indicator” of where price is compared to the ‘mean’ is helpful. Defining an upward sloping moving average as your definition of trend works as well with other filters included.
Nothing beats a solid understanding of price structure. Add a moving average in to give you an “indicator” of where price is compared to the ‘mean’ is helpful. Defining an upward sloping moving average as your definition of trend works as well with other filters included.