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Is there a difference?

  • Post #1
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  • First Post: Nov 20, 2007 6:01am Nov 20, 2007 6:01am
  •  Atomic_Sheep
  • | Joined Aug 2007 | Status: Member | 295 Posts
Is there a difference between using a lets say a 5 period EMA on the daily charts (just a simple example) and using a 120 period EMA on the hourly charts? Is there any logic to this? Any pros? Cons? Other thoughts?
  • Post #2
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  • Nov 20, 2007 8:49am Nov 20, 2007 8:49am
  •  bluebuddha
  • | Joined Apr 2007 | Status: Nobody™ | 356 Posts
Quoting Atomic_Sheep
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Is there a difference between using a lets say a 5 period EMA on the daily charts (just a simple example) and using a 120 period EMA on the hourly charts? Is there any logic to this? Any pros? Cons? Other thoughts?
Ignored
I found that, yes indeed, they are approximately the same most of the time. The exception is if there is a big upward/downward price movement on the longer term chart, or a price spike on the shorter term chart that is calculated into the MA.

If I'm mimicking, say 5 period MA daily with a 120 period MA on an hourly chart, I prefer to use EMAs. The reason has nothing to do with smoothness or lag, but the way the EMA is calculated: it only requires this bar and the previous bar. The reasoning behind it has to do with low-pass filters in electronic signals processing (where the concept of MAs originated), but I don't want to get into the complex math behind why.

Anyway, EMAs are nice for mimicking MAs on longer term charts, because once you get into, say 600 period or 1000 period MAs, it's not going to bog down your computer, which is trying to calculate 600 to 1000 data points for each MA you have up every time the price moves a pip.
  • Post #3
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  • Nov 20, 2007 9:09am Nov 20, 2007 9:09am
  •  philmcgrew
  • Joined May 2005 | Status: I am not your bro | 1,302 Posts
Quoting Atomic_Sheep
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Is there a difference between using a lets say a 5 period EMA on the daily charts (just a simple example) and using a 120 period EMA on the hourly charts? Is there any logic to this? Any pros? Cons? Other thoughts?
Ignored
Here's the difference for the CHFJPY chart. I picked this chart because it's a little more choppy than some others and that is where the biggest differences will appear. In some cases the difference was a few hundred pips. Only you can say if that is acceptable for your purposes but it is a common misconception that the EMA's are the same or nearly so.

Actual price was hidden for clarity however, the daily 5 EMA closely mirrors actual daily price levels.
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  • Post #4
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  • Nov 20, 2007 3:51pm Nov 20, 2007 3:51pm
  •  AndrewM
  • | Joined Mar 2007 | Status: Member | 145 Posts
Very good, A picture = 1000 words .. Thanks
If we aren't supposed to eat animals..... why are they made out of meat??
  • Post #5
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  • Last Post: Nov 21, 2007 12:43am Nov 21, 2007 12:43am
  •  Atomic_Sheep
  • | Joined Aug 2007 | Status: Member | 295 Posts
Thanks for the responses
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