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Investors Moving Averages

  • #1
  • First Post: Aug 10, 2012 12:28pm Aug 10, 2012 12:28pm
Hi Traders,

I have a simple question:

What kind of Moving Averages do professional investors use for long term trading the Forex markets?

From what I´ve learned I think the 50, the 100 and the 200 Moving Averages are very important.

What I want to know now, do they use simple Moving Averages or exponential Moving Averages in the Forex markets?

Ok, I can use both but I don`t want to clutter my charts with all kinds of MA`s.

Are there other important MA`s which professional investors use?
It ain`t no big thing, but it`s growing.
  • #2
  • Aug 10, 2012 3:34pm Aug 10, 2012 3:34pm
Here is IFR for EUR/CHF. As you can see it mentions numerous levels - MA's - Bollingers etc. All are used by traders in some fashion. When a pro taps you on the shoulder and says " ill have those stops" - you'll know you were sitting at some level that some MA told you was where you wanted to be

Level
Technical Significance
1.2147
Daily High Mar 14
1.2100
Psychological Level
1.2094
200-Day MA
1.2093
Daily High Aug 6
1.2008
20:10 FRI 10 AUG
1.2000
SNB Target Rate (6 Sep)
1.1990
2012 Low Apr 5
1.1900
Psychological Level
1.1016
W/E 11 Sept 11 Low
In trading, there is no bullshit. You either make money or you don't.
  • #3
  • Aug 10, 2012 3:59pm Aug 10, 2012 3:59pm
Quoting mrgreen
Here is IFR for EUR/CHF. As you can see it mentions numerous levels - MA's - Bollingers etc. All are used by traders in some fashion. When a pro taps you on the shoulder and says " ill have those stops" - you'll know you were sitting at some level that some MA told you was where you wanted to be

Level
Technical Significance
1.2147
Daily High Mar 14
1.2100
Psychological Level
1.2094
200-Day MA
1.2093
Daily High Aug 6
1.2008
20:10 FRI 10 AUG
1.2000
SNB Target Rate (6 Sep)
1.1990
2012 Low Apr 5
1.1900
Psychological Level
1.1016
W/E 11 Sept...
mrgreen,

thank you for your answer first.

Sorry, but please read my question again.

It`s a simple question about important moving averages, not about other important levels in trading.

If you can understand my question, please give a specific answer.

Thanks and best regards.
It ain`t no big thing, but it`s growing.
  • #4
  • Aug 10, 2012 4:13pm Aug 10, 2012 4:13pm
Quoting mctrade
...

Are there other important MA`s which professional investors use?

Really? You are asking amateurs what professionals use? That is absolutely insane....!!!
The Market pays you to be disciplined
  • #5
  • Aug 10, 2012 4:26pm Aug 10, 2012 4:26pm
Quoting mima
Really? You are asking amateurs what professionals use? That is absolutely insane....!!!
Hi mima,

I think you`re absolutely right.

It is insane to ask amateurs what kind of moving averages professionals use.

Thank you too and best regards.
It ain`t no big thing, but it`s growing.
  • #6
  • Aug 10, 2012 4:43pm Aug 10, 2012 4:43pm
Pro's would not put moving averages and important in the same sentence. They are used as a guide only and whether ma or sma, its really personal to each trader.
  • #7
  • Aug 10, 2012 4:58pm Aug 10, 2012 4:58pm
Quoting Porkpie
Pro's would not put moving averages and important in the same sentence. They are used as a guide only and whether ma or sma, its really personal to each trader.
Hi Porkpie,

thank you for your answer too.

Ok, I understand what you mean.

I asked this question because I thought that professionals use something like a standard setup of moving averages in their charts.

For example the 50, 100 and 200 MA or EMA.

Especially for long term trading in the Forex markets.

When it is as you say personal to each trader, then it is ok.
It ain`t no big thing, but it`s growing.
  • #8
  • Aug 10, 2012 5:41pm Aug 10, 2012 5:41pm
After spending many years in trding rooms - only about 50% of traders use MA.
Those who use it - use mostly 50 SMA, 100 SMA, 200 SMA.
They mostly use it as guidelnes for TREND and for TP/SL.

NB:
Don't try to use those as entry or crosses - tested in milions variations - all failed...

G.
  • #9
  • Aug 10, 2012 5:58pm Aug 10, 2012 5:58pm
Quoting gg53
After spending many years in trding rooms - only about 50% of traders use MA.
Those who use it - use mostly 50 SMA, 100 SMA, 200 SMA.
They mostly use it as guidelnes for TREND and for TP/SL.

NB:
Don't try to use those as entry or crosses - tested in milions variations - all failed...

G.
Hi gg53,

that`s a very interesting and instructive statement.

I think I`ve learned something today and will think about it.

Tank you very much gg53 and best regards.
It ain`t no big thing, but it`s growing.
  • #10
  • Aug 10, 2012 7:43pm Aug 10, 2012 7:43pm
Personally I use 62ema for direction, but for profitable trading it does not matter which to use but how and when to use it.
Find what works for you and back test until your confidence builds.

I wish you well in your journey
  • #11
  • Aug 11, 2012 4:00am Aug 11, 2012 4:00am
your right that my prev post probably want very helpful. 200MA is mentioned in IFR if it comes into play - so assumption may be it is important to someone
In trading, there is no bullshit. You either make money or you don't.
  • #12
  • Aug 11, 2012 4:06am Aug 11, 2012 4:06am
Quoting mctrade
Hi Traders,

I have a simple question:

What kind of Moving Averages do professional investors use for long term trading the Forex markets?

From what I´ve learned I think the 50, the 100 and the 200 Moving Averages are very important.

What I want to know now, do they use simple Moving Averages or exponential Moving Averages in the Forex markets?

Ok, I can use both but I don`t want to clutter my charts with all kinds of MA`s.

Are there other important MA`s which professional investors use?
I hope this will help
Curve-fitting moving averages
  • #13
  • Aug 11, 2012 6:03am Aug 11, 2012 6:03am
Quoting MackS10
Personally I use 62ema for direction, but for profitable trading it does not matter which to use but how and when to use it.
Find what works for you and back test until your confidence builds.

I wish you well in your journey
Hi MackS10,

thank you for your comment as well.

I´ll do my best to find out what works in the Forex markets.
There`s a lot to learn on that journey.

At the moment I´m watching and studying some english DVD trading courses.

Best regards and I wish you well too.
It ain`t no big thing, but it`s growing.
  • #14
  • Aug 11, 2012 6:12am Aug 11, 2012 6:12am
Quoting mrgreen
your right that my prev post probably want very helpful. 200MA is mentioned in IFR if it comes into play - so assumption may be it is important to someone
Hi mrgreen,

no problem and yes the price often reacts at the 200MA.

So in my view it seems to be good to have it in the charts, no matter what timeframe.

Thank you.
It ain`t no big thing, but it`s growing.
  • #15
  • Aug 11, 2012 8:20am Aug 11, 2012 8:20am
Quoting CrucialPoint
I hope this will help
Curve-fitting moving averages
Hi CrucialPoint,

thanks for your comment as well.

Also a very interesting statement about curve fitting moving averages.
Never heard about this before.

I have a question to you:

You said: "So far, different people use different numbers for the Moving Averages. I found out that people will tend to curve-fit Moving Averages. There was actually no solid reason as to why such value was used."

You also said: "The rule is a number that can be divided by the hour evenly (or divisible by the number of candlestick within the hour evenly)
Why hourly?... because the world's clock is synchronized hourly."

So as I understand this you mean it could be better to use other calculated moving averages according to the timeframes you use for trading.

In your case as you described as a rule to take a number that can be divided by the hour or divisible by the number of candlesticks within an hour.

Now here`s the crucial point of my question:

If those calculated moving averages as you described work for for you that`s really a good thing, no matter.

But couldn`t it be better when using moving averages to use moving averages which most of other traders use in their charts because there`s a higher probability that prices react at these MA`s ?

Therefore I also asked the question in the beginning of the thread.
I wanted to know what kind of MA`s professionals typically use for long term trading.

From what I´ve learned until today it seems to be better to use things in your charts which many other traders also see.

The same thing if you use an indicator.
For example: Why should I use a MACD with the settings XYZ when the standard settings are 12, 26, 9 which most other traders use?

Ok, every trader has his personal own methods for trading, his own chart setups and has to find out what works for him.

But generally isn`t it better to use simple things in your charts which many others use instead of complete different things?

That`s my question.
It ain`t no big thing, but it`s growing.
  • #16
  • Aug 11, 2012 9:13am Aug 11, 2012 9:13am
Quote


But couldn`t it be better when using moving averages to use moving averages which most of other traders use in their charts because there`s a higher probability that prices react at these MA`s ?


From what I´ve learned until today it seems to be better to use things in your charts which many other traders also see.

But generally isn`t it better to use simple things in your charts which many others use instead of complete different things?

That`s my question.
When MrGreen wrote this to your first post,

"When a pro taps you on the shoulder and says " ill have those stops" - you'll know you were sitting at some level that some MA told you was where you wanted to be"

He gave you an answer to the question you asked above. It's not his fault you couldn't see it, or understand it.
  • #17
  • Aug 11, 2012 9:36am Aug 11, 2012 9:36am
Quoting Dopey
When MrGreen wrote this to your first post,

"When a pro taps you on the shoulder and says " ill have those stops" - you'll know you were sitting at some level that some MA told you was where you wanted to be"

He gave you an answer to the question you asked above. It's not his fault you couldn't see it, or understand it.
Hi Dopey,

thanks for your answer.

Hmm, sorry you can be right.
I didn`t really understand what this means.

Does this mean that professionals (bankers or fund managers) are looking for hunting the stops of retail traders in areas of moving averages that many reatail traders use?

And therefore it would be better not to use these MA`s ?

I´m a little bit confused now.
It ain`t no big thing, but it`s growing.
  • #18
  • Aug 11, 2012 9:42am Aug 11, 2012 9:42am
Quoting mctrade
But couldn`t it be better when using moving averages to use moving averages which most of other traders use in their charts because there`s a higher probability that prices react at these MA`s ?
Before you start using words such as "probabilities", do you have any educational experience/background on probabilities and statistics? because if you don't have a degree in maths (or any long periods of self education in probabilities) then we can safely conclude that your understandings with "probabilities" are limited. Your assumptions regarding prices reacting on MA would be null.

Quoting mctrade
Therefore I also asked the question in the beginning of the thread.
I wanted to know what kind of MA`s professionals typically use for long term trading.
Real Professionals don't use 200 MA.... Marketing/Marketers uses 200 MA. Remember that because no-one else will let the cat out of the bag.

Quoting mctrade
From what I´ve learned until today it seems to be better to use things in your charts which many other traders also see.
Good luck with that.

Quoting mctrade
The same thing if you use an indicator.
For example: Why should I use a MACD with the settings XYZ when the standard settings are 12, 26, 9 which most other traders use?
Why did they created it so that you can change the settings? If you are right then it is useless to have other settings.

Quoting mctrade
Ok, every trader has his personal own methods for trading, his own chart setups and has to find out what works for him.
I gave you objectivity, not subjectivity... but if you prefer to be subjective, it is your choice.

Quoting mctrade
But generally isn`t it better to use simple things in your charts which many others use instead of complete different things?

That`s my question.
Yeah that's why many don't make it. Follow the failures and marketers instead?

  • #19
  • Aug 11, 2012 10:58am Aug 11, 2012 10:58am
Quoting mctrade

What kind of Moving Averages do professional investors use for long term trading the Forex markets?
No offense but I think you are missing the point here. MAs are great indicators for sure that tell you entry/exit points. I guess you already notice it (otherwise you wouldn't ask the question above).

The question you should ask is, "how can you use MAs to find entry/exit points?"

It can't be more insignificant if the pros use certain MAs, or not. The important point is to ask yourself how to use what MAs because price actions obviously react MAs on the chart (they reflect the market psychology -- tons of books available to learn it).

So, what is the answer? -- I don't know. But I've been doing good using 200EMA on 1H, 4H, and day. 150 and 365EMAs also seem to affect the price actions on the daily chart (see James 16 group). (actually on my chart I put only 200EMA and no other indicators).

Hope it helps
  • #20
  • Aug 11, 2012 11:08am Aug 11, 2012 11:08am
Quoting CrucialPoint
Before you start using words such as "probabilities", do you have any educational experience/background on probabilities and statistics? because if you don't have a degree in maths (or any long periods of self education in probabilities) then we can safely conclude that your understandings with "probabilities" are limited. Your assumptions regarding prices reacting on MA would be null.


Real Professionals don't use 200 MA.... Marketing/Marketers uses 200 MA. Remember that because no-one else will let the cat out of the bag.

Good luck with...
Hi CrucialPoint,

to answer your comments:

You`re right, no I haven`t any educational experience/background on probabilities and statistics and my understandings with probabilities are really limited.

But nonetheless I have eyes that can see price reactions in the charts.
I´m watching the charts every day and from my point of viewing prices often reacts at typical moving averages like the 50, 100 or 200 MA, that`s a fact.

You also said:"Real Professionals don't use 200 MA.... Marketing/Marketers uses 200 MA."

Sorry, but I can`t believe that.Even it is significant or not.

So why should I search for some mysterious, secret mathematically calculated other moving averages or some mysterious settings in indicators? That`s my question.

It seems like searching for the holy grail and I don`t want to spend my time with things like that.

As I said if it works for you that`s pretty fine and I wish you good luck too.
I´m sure you have much more experience in trading than I have and you`ll know what you`re doing.

Best regards.
It ain`t no big thing, but it`s growing.
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