Why do moving averages SUCK so much?

[.sigma]

“I have probably made a good discretionary call four times in the last 15 years, which isn't enough times to prove anything” @globalarbtrader

profound statement. But why don’t I believe you? Lol, only 4?? Modest man!

 

[murray t turtle]

Why do moving averages SUCK so much?

Omg.
The same reason you can't buy a $200 pair of Jordans and expect to make it to the NBA.

I mean wtf... are you guys really this clueless?

Whatever.

Maybe tweak it down to the 183.0452971 moving average and you'll achieve the Holy Grail.

%%
That can be a good thing;
+ good thing more make it in ttrading/investing than the NBA. LOL on the decimal ma\,

 

[easymon1]

But I tested everything from like 2 day moving averages (lulz) through 300 day moving averages.

Try this one, Holmes...
https://elitetrader.com/et/threads/...e-absolutely-wrong.357918/page-9#post-5372934

 

[.sigma]

Moving averages are absolutely necessary for any trader. At least a quick glance of its position relative to spot couldn’t hurt.

I’ll say this though, if you’re trying to predict movement of price via MA cross overs you’re lacking in understanding of MA’s, and going with what the industry pushes on the populace. Think outside the monkey brain and you’ll find more clever ways to view/use price averages

 

[Bad_Badness]

Don't confuse a mathematical representation with your interpretation of it. Both are revisable. This is one of the oldest known distinctions. We are talking BC, 2200+ years.

Probably time to learn and apply it, unless you think you are so exceptional the fundamentals don't apply to you. Only an ego tripper or the ignorant thinks their interpretation cannot be wrong and the mathematical one is.

The latter is easier to fix than the former.

 

[panzerman]

Funds, computers, algos, etc. are all garbage. Markets never change, allowing the use of ancient techniques handed down from traders from Mesopotamia, to Thales of Miletus, to Munehisa Honma and Livermore, to this: https://www.elitetrader.com/et/threads/prediction-based-trading.351176/page-40 Do you think that Livermore ever used moving averages? NEVER! So that means the truth of the markets cannot be found through technological advancements; it is by looking deep into the past, backtested from thousands of years ago from cuneiform and papyrus scrolls, that one can discern a repeatable pattern that has endured to the present day. This is because human behavior remains unchanging.

Pattern trading is just an example of pareidolia. Name me one pattern that you personally have backtested and proved to be positive expectancy. Name any pattern that anyone else has proven to be positive expectancy.

The one exception might be Jim Simmons. Since we don't know the details of his method(s), who can say for sure?

 

[stockpredictor]

Pattern trading is just an example of pareidolia. Name me one pattern that you personally have backtested and proved to be positive expectancy. Name any pattern that anyone else has proven to be positive expectancy.

The one exception might be Jim Simmons. Since we don't know the details of his method(s), who can say for sure?

The patterns I use are nothing to do with triangles and the usual garbage. If something worked, it wouldn't be common knowledge.

Again, you can look up any of the trades I made in that spreadsheet as called in real time referring to the post # in each row for entry and exit.

 

[KCalhoun]

dudes read my epic new article p6 this months TASC for my take on 50/200 sma channel trading the right way

 

[Slope Trader]

... If markets trend, how can moving averages (and their reverse) suck so bad?

-

Related to Ken's post #118 and his new article, Perry Kaufman (author of the tome "Trading Systems and Methods") published a study of moving average systems in the May issue of Technical Analysis of Stocks and Commodities.

The rules were to simply go long when the slope of a MA turned up and to exit the trade when the slope turned down (a long only system). He used relatively long-term moving averages (70 and 110 day) and different specific entry techniques to test the period from 2000 to 2020 in 3 markets - emini S&P, Eurodollar and Euro Stoxx.

Interestingly, he got strong results in ES and ED, consistently generating profit factors above 3.0 (a really good number) and reasonable MaxDDs.

There are caveats because many system performance metrics were not shown, but it's nice to see evidence that simple MA systems can produce such good results... especially in backtests performed by someone with a lot of experience in doing them correctly.

The article is posted at the TASC homepage at http://traders.com/
(might need to be a subscriber for access)

 

[murray t turtle]

Name me one pattern that you personally have back tested and proved to be positive expectancy............

%%
EASY to name 2;
i'll name one/buy 200dma/SPY...........................................................[EDIT not saying its the best/that another thread + subject to change/LOL]