Why do moving averages SUCK so much?

You have to understand that most indicators are not accurate when the market are on the ride. They can help you to do a reading better but you cannot rely on just that.
 
Moving Averages Bottom Line... Yes, they do suck most of the time. In general, a waste of time to try to make a trading system out of them. (What does that say for MACD? Yes I know... somebody will say a "move was confirmed by MACD"... but any trader worth his salt should have seen the play long before the MACD Cross. I think of it this way... "MACD = a moving average of something that sucks.")

Except... the 50 and 200 day MAs often work as support/resistance.... that's why most traders keep an eye on them. Sometimes they don't work as S/R... the price moves back and forth across one or both of them like they aren't even there. At such times, traders should ignore them for now but keep an eye on for later when they once again act as S/R.
 
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A moving average can be considered a summary of price action. A range bar can also be considered a summary of shorter time frames. In other words, a moving average can be looked at as a summary of a summary. A trading system consisting of entries and exits solely on moving averages should not provide an edge. However, moving averages on a shorter time frame, when used in context of a longer time frame, especially when combined with another trading methodology, may have some value in filtering short term “Noise” from potentially “Significant” signals in an attempt to use tighter money management based on the shorter time frame while attempting to profit from the larger price range of the longer time frame.
 
There's a passage from a book on trader's (Market Wizards?) where one trader says (paraphrasing)..."throw your charts on the floor and jump up your deck and look at them. If they are going up, buy, if they are going down, sell"
It amazes me to no end that "traders" try to find perfection where none exists.
 
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