Price leads the SMA or EMA or what ever moving average. So what does moving averages tell us?
simply where price is in relation to where price was and has been previously. Helpful for us retail traders? Not really, other than helping us keep
perspective but thats more like training wheels for riding a bike.
Like all indicators it will work nicely in a trend and when price is massively extended/oversold etc. BUT then comes the time where the trend changes and suddenly these moving averages along with all other indis then give you wrong information. They were obviously designed by banks so you are left holding the bag. buying high while they sell. Hence why sometimes you win sometimes you lose. Take into account psyche, brokerage, thinking you can read news sentiment and suddenly your accounts are wiped over and over again. asking the wrong questions and data .
simply where price is in relation to where price was and has been previously. Helpful for us retail traders? Not really, other than helping us keep
perspective but thats more like training wheels for riding a bike.
Like all indicators it will work nicely in a trend and when price is massively extended/oversold etc. BUT then comes the time where the trend changes and suddenly these moving averages along with all other indis then give you wrong information. They were obviously designed by banks so you are left holding the bag. buying high while they sell. Hence why sometimes you win sometimes you lose. Take into account psyche, brokerage, thinking you can read news sentiment and suddenly your accounts are wiped over and over again. asking the wrong questions and data .