Question about moving averages

I have noticed that a lot of people pay close attention to the 200SMA on the hour chart and the daily chart as well as the 100SMA 50SMA and 55EMA Etc...

My question is, what are the best moving averages to plot that carry the most significance on a technical basis?

Also, would you recommend having different moving averages for different time frames? I know that if price is near the 200SMA on the hour chart its no where near the 200SMA on the 5min chart. Would there be different moving averages that carry more significance on a shorter time frame as well as a long time frame?

I hope this question makes sense

Thanks

Jeremy

Try them yourself. What's good for others doesn't always mean it's good for you.

I think I read somewhere that the 200sma is used a lot by traders to determine trend.

Since then I have found it useful. You know at a glance, if the price is below the 200 on all or most time scales then it's not bullish. And vice versa.

I don't use it to trade off but it's always on the chart as a warning, if you like. IMHO if you start putting more moving averages on your chart then it's because you want to trade off them as a strategy. Otherwise they would just confuse the issue.

The issue with this mindset is that as many key players who trade the markets will sell when the price goes above the 200 as do buy. Take oil. When it was at 100, 105, 110, 115 and on and on... who would you determine the "smart" money was, those who were getting out or those who were getting in because it was a "bullish" trend.

Jeremy, like anything else, MAs have to have a purpose. I personally enjoy the MA I use. It doesn't relate to anyone else, hold any significance, it just helps me set up trades. Just keep in mind that simply knowing whether a trend is "bullish" or "bearish" (according to an MA, not in reality) doesn't actually help you... there must be a purpose behind you knowing. Some systems you could create for yourself will short when below 200 on 4hr but above 200 on daily or weekly. With a tight stop, you just might get that reversal. Others, you may see price above 200 on weekly, daily, 4hr, you nibble on the 30 min. You have to understand what you wish to use it for, then it will reveal a use... or you will find it actually has none at all?

No. Just what fits your approach. Technical significance for an MA is going to be almost non existent on 5 min. By "almost" I mean simply that I have never seen any, dont believe there is any, but don't want to tell off people who use an MA efficiently on lower TFs.

I find moving averages pretty much useless. The 200 SMA is mentioned a lot because it was popular with stock traders. Since there are roughly 200 hundred (stock) trading days per year, it gave traders a rolling annual window. If you believe in the 200 SMA, then it stands to reason that the 50 SMA is indicative of quarterly results (1/4th of 200 is 50).

55 is a fib number which is a totally baseless reason to pick a MA length.

You should be able to look at a chart and determine the trend. If price peaks/valleys are making higher highs and higher lows, the trend is up. If they are making lower highs and lower lows, the trend is down. Nothing is faster than price so why would you apply a lagging indicator to your chart to tell you what price is already trying to accomplish?

hey jeremy..... your question makes perfect sense but tends to prove the axiom, ask a thousand traders get a thousand answers......

or 999, cause i , for one, don't have the perfect answer.....

the small moving averages on the lower time frames reflect price faster....

when you look at differing moving averages on a small time frame your are in a sense comparing higher time frames on a single lower time frame chart.....

such as,
the 10 period ma is thought to have some significance ......

so if we were to place the 10 ma on a 30 minute chart, we could also place the 20 ma on the same chart and see just what the 10 ma is doing on a 60 minute chart.... thereby comparing the 2 time frames...

placing the 80 ma on the same chart will reflect what the 10 is doing on the 4 hour chart..... and so on....

there will be a slight difference, and the difference increases as the 'compared ma' increases , but within reason the values will be close enough to give you a quick glance view of the 10 ma on the higher time frames.....

someone that trades with the higher trend might buy/sell when larger moving averages support the trade.....


to compared speed of change on differing time frames, use the macd and adjust the higher number..... same principle, just more math.....h

I am not sure if period of MA has any meaning. When we change it all we do is to look at the chart from different perspective. But the chart itself is still the same. Or am I wrong?

I appreciate everyones help and insight

Thanks

Jeremy