What is the best moving Average to show the current trend on a
one hour chart ?
Ignored
Take a look at the Hat thread. It's impressive for following the trend.
Here's my experience with MA's. A person could pick just about any number on any timeframe and come up with a set of rules for helping to define the trend. Since the MA is just a lagging average of prices, prices will always react in and around the MA. Personally, I use a 200 WMA on 5 and 15 minute charts. I've learned how price action reacts to that period. You could just as easily choose another period and be just as right. Again, I'd refer you to the HAT thread for helping to define trends.
What is the best moving Average to show the current trend on a
one hour chart ?
Ignored
THERE IS NO BEST OPTIMIZED MA OR ANY OTHER INDICATOR!
The beauty and the beast of the trading market is that its trends and flats last DIFFERENT AMOUNT OF TIME.
A ma that was too fast last month (or year) can be too slow today... An optimal period for MA today maybe too fast or too slow tomorrow... The best idea is to find an indicator or a system that has the least optimization possible and use it. It will not be optimal, but it will be more stable.
For ema's I liked this combination 5,21,55,233 (fibonacci numbers). On intraday use of that can get 100+ pips on pound...
Or 8,24,48,120,240 could work well for 1 hr chart...
Joined Nov 2005
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Status: Trading, writing, conquering.
|721 Posts
Depends on what trend you are looking for, short term trend call for shorter MA, such as the 34 EMA, longer term trend you might use something like the 50SMA, 100SMA or 200EMA. Alternatively look at Multiple Moving Averages, such as outlined in my trading manual at http://www.forexfactory.com/forexfor...ead.php?t=6233
You can quit and they won't care, but you will always know.
Take a look at the Hat thread. It's impressive for following the trend.
Here's my experience with MA's. A person could pick just about any number on any timeframe and come up with a set of rules for helping to define the trend. Since the MA is just a lagging average of prices, prices will always react in and around the MA. Personally, I use a 200 WMA on 5 and 15 minute charts. I've learned how price action reacts to that period. You could just as easily choose another period and be just as right. Again, I'd refer you to the HAT thread for helping to define trends.
Joined Jan 2005
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Status: Keep Learning
|1,180 Posts
There is always the old problem of MAs which is they are either too fast or too slow most of the time, & in 10% of the time they fit...This is because the fact that the price itself dictates the movement of the MA & not vice versa...
If you can solve this problem someday, you might have got a solution for one of the biggest problems facing MA traders....I started searching for a solution for the problem 3 months ago...Just trying to develope an adaptive MA in which it can adjust itself not only in the speed of the price, but also in the mood of the price...For example, if the price is fast, my MA must be fast, but it will still lag, if the price is slow in its' movement, my MA should be slow and so on....About the mood of the price, I am trying to find a way in which the formula itself of the MA discounts strong trends, congestions, V shaped reversals & so on....I don't really need to include every single pattern in the formula because I know it would be impossible to do this, but I only need to include reversals, congestions & trend strength....
There is always the old problem of MAs which is they are either too fast or too slow most of the time, & in 10% of the time they fit...This is because the fact that the price itself dictates the movement of the MA & not vice versa...
If you can solve this problem someday, you might have got a solution for one of the biggest problems facing MA traders....I started searching for a solution for the problem 3 months ago...Just trying to develope an adaptive MA in which it can adjust itself not only in the speed of the price, but also in the mood of the price...For example, if the price is fast, my MA must be fast, but it will still lag, if the price is slow in its' movement, my MA should be slow and so on....About the mood of the price, I am trying to find a way in which the formula itself of the MA discounts strong trends, congestions, V shaped reversals & so on....I don't really need to include every single pattern in the formula because I know it would be impossible to do this, but I only need to include reversals, congestions & trend strength....
Wish me luck, I am still early in my research...
Thanks,
Nader
Ignored
ABout MA's. For MA to spot a flat you need atleast 3 moving averages. For it to spot reversals you need multiple moving averages to change direction completely by pulling themselves up or down behind a long term MA.
First the trend will change on 1 minute, then 5 minute charts, then 10, then 15 minute charts and so on until the major trend on large scale charts changes.
As i post this, i am an hour away from entering an online webinar with Raghee, teacher of the "Wave" (a 34ema Close/High/Low see these free online training videos) who uses this on her 30m,60m,180m,240m,Dailies. She states that it is no Holy Grail, but it works for her in the various market conditions. I too have searched through the MA madness and from my past year of study have come back time and again to using FIBO-numbered emas beginning w/the 8ema and going up to the 377.
Along this study i purchased the DVD "Better Trading with the Guppy Moving Averages". Understanding of the market groups and how the GMMA can be used in indicating the market's mood was a nice addition to the library of knowledge. I'm also beginning to dig into the RMMA (Rainbow Multiple Moving Average) discussed by Akuma99 his "Not So Squeezy" thread Well worth the read if you have not yet done so.
For me, there is no point to find the ultimate moving average at all. When you use MA, you should expect to have loss during the range market and that's normal.
I have been testing MA for quite a long time, and they all give similar results over a longer time frame - about 33% winning ratio....However, with a proper money management plan, you can end up with profit with ANY MA number you selected. Therefore what's the need to search the "best" MA?? Get on with a proper money management and fire it off...
If you really need advise using MA - the only advise I can give you is to "AVOID TRADING DURING HOLIDAYS" - at least 2 weeks prior the holiday and 1 week after the holiday.
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Joined Nov 2005
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Status: Trend trader
|297 Posts
Some of the best traders have said that to find the trend, simply walk to the other side of the room, and upom looking at the screen (or paper in their days) and it should be much clearer which way the market is trading.
Trends are formed by the collective psychology of the traders looking at their screens.
Use the same MA's as many of them and you'll do alright.
Many traders use the Fibonacci numbers, 8, 13, 21, 34, 55...
Many use the 20, 50, 100, 200,
Some use 25, 40, even the ten,
Most use EMA, I think, sometimes with a simple on the longest time frame they use, i.e. the 200.
Put some up, and when price treats a MA as a support and/or resistance line, especially 3 or more times, than you have hit on one which is very useful at the time you are looking, and should be tried again in that same market.
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Joined Jul 2010
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Status: Oneinthechest&Oneinthehead
|49 Posts
If you pull any daily or 4h chart, you will see the price bouncing off or breaking 20,50,100,200. I believe they are widely used by financial institutions as their primary method of trading. In an up trend (when price is above 200) I wait for pull backs off the 20 ema or even the 50 em to enter. If the price keep on bouncing of the 20 ema for a while and starts bouncing off the 50, it is highly likely that it will go down farther and bounce off the 100 and then go to the 200, if the price breaks the 200 that you going be looking at a down trend for a while. I used momentum and RSI, to confirm my entries, as well as looking at candle size and spikes. You can use the same concept in the down trend. This best use with daily, but I would not go for less than 4H. It is highly accurate.
Each period of moving average influences the graphic from 0 up to the Infinite, the moving average measured the average price but i do not believe in that, according to the period of moving average has a certain amount of force and according to the period of moving average will influence in a given time
You can try to learn these settings
8 EMA 13 EMA 21 EMA 34 EMA 55 EMA 89 EMA 144 EMA (Fibonacci sequence)
Iīm not a teacher i donīt care if is not sufficient information
I think Moving average is a good indicator, is the only one that detect how market works, actually the market move with Force and time because of logic, the moving average is a great tool to detect the movements (force and time, based in a certain sector of candles)
I am using a 50 ema and 200 ema on the 4h and the 800 ema and the 3600 ema on the 15 min chart. The reason my emas on the Ltf are so high is because they are essentially 4h moving averages which help me enter and helps me try to stay on the right side of the market it also makes my rules easier and simpler
{quote} THERE IS NO BEST OPTIMIZED MA OR ANY OTHER INDICATOR! The beauty and the beast of the trading market is that its trends and flats last DIFFERENT AMOUNT OF TIME. A ma that was too fast last month (or year) can be too slow today... An optimal period for MA today maybe too fast or too slow tomorrow... The best idea is to find an indicator or a system that has the least optimization possible and use it. It will not be optimal, but it will be more stable. For ema's I liked this combination 5,21,55,233 (fibonacci numbers). On intraday use of that...
Ignored
EXACTLY
So you need to update it periodically depending on the TF you trade.
Thereīs no free lunch.
Only business as usual..
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