Aloha! There's no particular reason why I prefer 21 over 20. But they're more or less identical as you can see in the chart below, so it makes no difference. What's more important to note is that you should never use EMA alone (or any indicator or oscillator for that matter). It should always be used in conjunction with price action.
Which setting of MA does work well?
- Thread starter Andrew_0
- Start date
Thank you schizo. I agree, very minimal difference. With such a specific number, I thought it’d be worth asking
Mahalo!
Mahalo!
I really like this indicator and spend so much time testing to find what setting is the most appropriate for my trading style. The beauty of the Moving Averages is that they are simple to use, they don’t overwhelm the chart, and you can build an entire trading strategy based on one or a few different MAs.
I know that there are hundreds of different trading strategies with moving averages, with different lengths such as 9, 12, 21, 42 days etc, and different styles such as simple, exponential, smooth etc.
I have tried many of them. The problem with the moving averages is that when you are backtesting your strategy they show great performance. However, when you try live-trading the story is different, you can’t see clear signals I least they didn’t work for me.
Anyway, I found an MA that I use and it works for my trading strategy. It is the Exponential Moving Average with 21 days. Only one. It helps me to identify potential support and resistance levels. This kind of MA acts like a magnet for the price. If the price is too far from it, maybe that’s a good signal for a trade because the price sooner or later will touch the MA again.
I know that there are hundreds of different trading strategies with moving averages, with different lengths such as 9, 12, 21, 42 days etc, and different styles such as simple, exponential, smooth etc.
I have tried many of them. The problem with the moving averages is that when you are backtesting your strategy they show great performance. However, when you try live-trading the story is different, you can’t see clear signals I least they didn’t work for me.
Anyway, I found an MA that I use and it works for my trading strategy. It is the Exponential Moving Average with 21 days. Only one. It helps me to identify potential support and resistance levels. This kind of MA acts like a magnet for the price. If the price is too far from it, maybe that’s a good signal for a trade because the price sooner or later will touch the MA again.
Those are just the numbers I pulled out of my peripheral.
Whereas, with Moving Averages you get the best results with Stocks (Commodities, Futures, etc..) where trends prevail, i.e., large movements, while they are not indicated in meanreverting Stocks, if it may be helpful, here are videos of 2 traders who have achieved great results and also use moving averages:
Oliver Kell (2020 US Champion Trader) and Kristjan Qullamaggie:
Oliver Kell (2020 US Champion Trader) and Kristjan Qullamaggie: