Why moving averages are important?

Personally I don't think they are useful however, like any indicator, if everyone else uses them they could become useful.


Stick ANY MA on your chart and you will find bounces off it and crosses over it. Maybe that is the one that works .

max

They aren't. They are by definition lagging and have zero predictive value. Besides, most traders using MAs go about it the wrong way anyway. As the name implies, it is the average price for the last X periods. Most traders buy when price goes above the MA, or when a short period MA crosses above a long-period MA, or when the MA has a positive slope. Here's why they're trading poorly - they're buying ABOVE the average price and selling BELOW the average price, which is the wrong way to trade! Buyng retail and selling wholesale is a guaranteed way to lose.

The Moving Average is undoubtedly the best indicator to use to lose money in trading.

Made my day! Love it

As every aspect of technical analysis, moving averages are important because... traders believe they are important. Otherwise they would not work

On my chart I use SMA200 100 55 40 and 20 that are very popular. I use them as pace to look for support and reversal.

for instance look at the GJ monthly and how the pair reacted when it broke/rejected SMAs.

they are not important but 1 EMA on a chart can help us get a sense of how exhausted the price is which can sometimes be deceiving by chart auto scale.

so a good use for MA (or better EMA) would be:

-don't trade when price is at the EMA (let the big boys decide where the price will go)
-pay attention for a reversal trade when price is X pips away from EMA


It's just a nice tool to have nothing more.

It is a statistical math nothing more

For understanding why are moving averages importance we should learn what is moving averages now i am describing this..

Among the most popular technical indicators, moving averages are used to gauge the direction of the current trend. Every type of moving average is a mathematical result that is calculated by averaging a number of past data points. Once determined, the resulting average is then plotted onto a chart in order to allow traders to look at smoothed data rather than focusing on the day-to-day price fluctuations that are inherent in all financial markets.

The simplest form of a moving average, appropriately known as a simple moving average (SMA), is calculated by taking the arithmetic mean of a given set of values. For example, to calculate a basic 10-day moving average you would add up the closing prices from the past 10 days and then divide the result by 10. In Figure 1, the sum of the prices for the past 10 days (110) is divided by the number of days (10) to arrive at the 10-day average. If a trader wishes to see a 50-day average instead, the same type of calculation would be made, but it would include the prices over the past 50 days. The resulting average below (11) takes into account the past 10 data points in order to give traders an idea of how an asset is priced relative to the past 10 days.

i think its not so important but ain't useless either.
true that it help indicate trend, if it isn't, why would our platform put it on the "trend" tab :



it also help me to somehow, because every price will come back eventually to this equilibrium line, to get rejected or not to get rejected ..
if your using two MA, they can crossovered each other to tell a mild direction..im using two different colour, so if the white line up then it go up and vice versa, and if the "danger" red line get breached then well..i get my banana and close my deal..

if i am a broker i will pay you a huge monthly money just so you don't replay

you always see the bad in everything in the forex

please be optimistic little bit

read (how to be a millionaire) or (poor dad and rich dad)

it is healthy for you

I certainly do not see the bad in everything... Apparently it's possible to become a millionaire by selling a book called "Poor dad, rich dad" and organizing expensive seminars ...
I think it's good

hahaha

nice idea

so let me think in a book name and became a rich also BRO

Moving Averages are important because they help identify the trend and so many of the institutions and hedge funds use them. Those guys ultimately move the market so getting on board with them must be a good idea!!

When I first started trading the way I do now, I only ever took longs above the 10 & 21 EMA and shorts below them. Put both on a 4 hour chart and see how many times it would save you.

If the market isn't trending there's a simple answer, wait for one that is!

i think because Market Movers use them too and trade with it, dont forget to use the 200! that one is very important

in my view, EMAs allow traders to reduce possible effect of lag and respond to buy and sell signals more quickly. It is a trend following indicator. It tells you the current trend. Even comparing EMAs with different lengths enable you to get better insight of what is happening with the stock. You can use 200 day EMA to see long term trend while for short term trend 9 and 12 day EMA helps you to a great extent. Moreover, the responsiveness of exponential value makes it possible to produce different set of indicators helpful in short term trading

you guys brought a thread back from the dead.. the original poster's account is long gone by now...

It probably depends on who you ask, what strategy they use, and what time frame they use as to whether they are truly important or not. Some will swear by them and others largely ignore them. I believe they are more important in identifying bigger long term movements.

So MA dont work??? jajjajajajjaja I see that the big volume trade the MVA as s/r to the pip every day in eur/cad and others paírs I follow, so to me it's very clear that they work amazingly, to the exact pip.

Look price fighting with a MA , you will see volatility that means that the volume trade the MA, and If the volume trade them they work as do Fibonacci, pivots, etc and the ony reason they work is because the Big Money is watching them.