Moving Averages Cheat Sheet

Moving averages are very powerful tools if you know how to use them as leading indicators rather than lagging indicators. I agree that all those crossover methods and using moving averages with fixed periods for all conditions are not effective if not totally useless. You should know every time which period is effective in the market and then find creative methods to use them.

Fully agree with this post. A very powerful indicator indeed but absolutely not to be used as described in TA books. Golden crosses and death crosses are total nonsense. MAs can also be used in whichever timeframe and for whichever instrument. The key is to find how they work, but they do!

Learn to play with a MA instead of let it play with you.

Ever played with a T3? I play for Years with the T3 an I earned a lot of money with that tool.

Moving averages are essentially lagging indicators and should never be used to determine the entry or exit of a position. Although very popular indicators, they are the worst tools in a trader's toolkit. It's best to rely on price action to read a chart.

LOLz.... you guys make me laugh. Why all the moaning about "lagging indicators"? If you are searching for a "clairvoyant indicator", then good luck with that! Some of you (if not all of you) have been through "The System" of education supplied by R. Foundation syllabus. You learned how to average everything in science, Tech., Medicine etc. You were told in Catallactics (wrongfully called "Economics") of "Ceteris Paribus" and you believe that is the real world? Today you are being told to "straighten the curve" all in the name of statistical "mean" or averages. The whole system is based on AVERAGES!!

Conclusio: If majority of market participants uses one tool the most, then you will be foolhardy not to use such tool. Remember, only a bad workman quarrels with his tools! And moreover, if you do not know your passt mistakes you are bound to repeat it!! Over & Out!!!

Thats one of the main reasons aside from psychology why most traders loose. They trust all these lagging indicators, which are just formulas which cant adapt to market conditions at all. Hindsight bias makes people believe they work when looking at history, but cannot do the same thing going forward.

The moving average can show you where price was 20 bars ago. Only an idiot uses moving averages that lag price. They are not support or resistance levels. They are pretty lines on a chart that mean nothing. They have no predictive power, nor to the levels they create mean anything.

Everyone is talking about using moving averages in different ways, that work likes its some kind of magic. The moving averages let you know where the market is in relationship to the last number of periods. As you are more likely to make money in a trend all the moving averages do is tell you is the trend direction in the past.

Moving averages are the most powerful tool of technical analysis if u know how to use them properly... Even if I say that only moving averages moves the whole financial markets then it will not be worthless to say, think out of the box. U are using the moving averages the very wrong way...

Thank you Nobody-yet. If price is above 50 SMA we are LOOKING to buy and wise versa if you are a trend trader, but the market is full of other types of traders. In my opinion the most important thing in trading is to take half your position off as soon as you break even, take another 25%off if the chart allows and let the rest run. If you caught a real trend, that is where your profits lie. Unfortunately the market trends only 20% of the times, and you will make small winners/small losses most the time. The old saying is true. keep the losses small and let the winners run. DO NOT GET GREEDY, TAKE THE FIRST HALF OFF AT FIRST BREAK EVEN!

not one person in the universe can predict what direction the next tick will be but i will take any tool i can find to give me a edge to make a profit.

With all the above said I only have one question, which one is more reliable, the 100 or the 200 EMA?

Moving averages is directional and useful, when align with other indicators. No indicator in the world is useful on its own, until it aligns with several other indicators.