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30 week WMA Weinstein

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stargazer

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Hi all

Started reading the Stan Weinsteins book "Secrets for profiting in Bull and Bear Markets" and was wondering how you apply the WMA 30 week MA. I only can find SMA and EMA.

Can you use the other moving averages and what setting would be closest to a 30 week WMA?.

If you are looking at a daily chart what would your setting be?

Anyone use his methodolgies and your thoughts.

Regards
SG
 
WMA is short for weighted moving average where each value in the moving average is weighted according to how recent it is - i.e. prices closest to today's value have the highest weighting (they are seen as the most relevant).

You can use any moving average you like it depends on which type suits your particular time frames, trading style and 'edge'. Most packages should calculate the WMA for you if you so desire, alternatively it's a fairly simple formula that you could program in yourself. If you're relying on an online charting program like from your broker it's unlikely you'll find it.
I have read that the 21 day EMA gives close results to a 30 day WMA but I haven't tested it myself so can't vouch. Either way it won't be the same figure due to the nature in which both MAs are calculated.

Whatever your chart timefram (daily, weekly or yearly) the method to calculate the MA is the same. The only difference is whether you're using a daily, weekly or yearly price as the basis. So if you're after a 30 day WMA you would take the last 30 days worth of prices and apply the appropriate weightings and calculate your MA.
 
Hi Kurwa

Thanks for your reply.

Kurwajegomac
Whatever your chart timefram (daily, weekly or yearly) the method to calculate the MA is the same. The only difference is whether you're using a daily, weekly or yearly price as the basis. So if you're after a 30 day WMA you would take the last 30 days worth of prices and apply the appropriate weightings and calculate your MA.
Click to expand...

I am just a tad confused in the book Stan refers to 30 week moving average on a weekly chart. WMA.

Then in an example on a daily chart he refers to a 200day MA...? Wouldn't this be a 30 day moving average on a daily...30 week on a weekly...etc

Not clear on this.

Cheers
SG
 
stargazer said:
Hi all

Started reading the Stan Weinsteins book "Secrets for profiting in Bull and Bear Markets" and was wondering how you apply the WMA 30 week MA. I only can find SMA and EMA.

Can you use the other moving averages and what setting would be closest to a 30 week WMA?.

If you are looking at a daily chart what would your setting be?

Anyone use his methodolgies and your thoughts.

Regards
SG
Click to expand...

It's been a while since I read this book, but quickly looking through it again I can't see any mention of a weighted moving average. When he introduces the moving average on page 13, and on all the following diagrams he just refers to it as a "30-week MA". So that would just be a standard moving average (ie. simple moving average, SMA), not a weighted moving average. The index in the back of the book also has no mention of a weighted moving average. The pages that the index points to regarding moving averages (p13-14, & p313) only refer to standard moving averages. What page did you read about weighted moving averages?
 
Hi Alter Ego

Very good pick up there, i obviously picked it up from reading other threads etc and at this stage have not found it in the book either, i am only quarter of the way through, skimmed it at first.

I found it in the Weinstein Waves thread where it was mentioned by Bunyip.

Weinstein Waves Thread
Bunyip
His usees the 30 week Weighted Moving Average (WMA) in such an effective and commonsense manner that you'll be wondering why you didn't think of it yourself
Click to expand...


Cheers
SG
 
stargazer said:
Hi Alter Ego

Very good pick up there, i obviously picked it up from reading other threads etc and at this stage have not found it in the book either, i am only quarter of the way through, skimmed it at first.

I found it in the Weinstein Waves thread where it was mentioned by Bunyip.




Cheers
SG
Click to expand...

Well that differs from what the book says. On page 313 he describes how the moving average is calculated, and it's clearly a simple moving average (SMA) that he is describing, not a weighted moving average.
 
Hi

No problem.

I still not clear on what to use on a daily yearly chart.

Weinstin clearly advocates the 30MA on a weekly chart. Does this also apply to a daily chart or would a 200 MA apply.

SG
 
stargazer said:
Hi

No problem.

I still not clear on what to use on a daily yearly chart.

Weinstin clearly advocates the 30MA on a weekly chart. Does this also apply to a daily chart or would a 200 MA apply.

SG
Click to expand...

SG.
Put any stock on clean chart,(suggest SLR ), add the type of moving average and period and compare the results. i.e. 34ema, 34wma and 34sma. See which moving average fits the picture best. I use 34wma on SLR.
I always use Fibonacci numbers so it will be 34 wma and 144 or 189sma for Sams suggestion.

Each stock has its own" DNA", so its up to you to use a period that gives the best picture. I prefer 34wma and I use 13(bar) and 34(line) CCI to compliment this. But everbody to his own. With SLR you will notice how the price continually test the 34wma.
Eventually the price increases to Stage three as suggested by Sam.
With 34wma weekly chart or 144sma (daily)it broke out about 22 -23cents, retested the 34wma then moved up. My first trade was 36cents entry.(but thats another story).
Cheers
 
joea said:
SG.
Put any stock on clean chart,(suggest SLR ), add the type of moving average and period and compare the results. i.e. 34ema, 34wma and 34sma. See which moving average fits the picture best. I use 34wma on SLR.
I always use Fibonacci numbers so it will be 34 wma and 144 or 189sma for Sams suggestion.

Each stock has its own" DNA", so its up to you to use a period that gives the best picture. I prefer 34wma and I use 13(bar) and 34(line) CCI to compliment this. But everbody to his own. With SLR you will notice how the price continually test the 34wma.
Eventually the price increases to Stage three as suggested by Sam.
With 34wma weekly chart or 144sma (daily)it broke out about 22 -23cents, retested the 34wma then moved up. My first trade was 36cents entry.(but thats another story).
Cheers
Click to expand...

WOW
Really???
You believe that?
 
stargazer said:
Hi

No problem.

I still not clear on what to use on a daily yearly chart.

Weinstin clearly advocates the 30MA on a weekly chart. Does this also apply to a daily chart or would a 200 MA apply.

SG
Click to expand...

You can use a 30 week MA on a daily chart if you so wish - 30 weeks = 150 trading days Which is close to the 200 day MA. However - the 30 week MA will base the averages on the weekly price whereas the 200 day MA will base it on the daily price. You can use either one with a daily chart it's just personal preference.

That being said it's common for people to use a daily moving average when looking at a daily chart. There's no right or wrong way to mix them. You need to determine whether you want to use a MA or not and how it applies to your trading/investing.

Weinstein's book is very good at explaining the basic concepts of support, resistance and conditional stops but don't forget that every graph in the book utilising the 30 Weekly MA and 200 Daily MA has been carefuly chosen to illustrate his point. He's not going to put in examples where the MA method doesn't work (because it certainly will not work in all circumstances). So be wary when adopting his printed strategy as yours - as you should be wary of any book you read.

My advice: Run a back test using the 30 weekly SMA, EMA, WMA and 200 Daily SMA, EMA, WMA with the stops placed exactly as he describes and analyse the results. Then run the same back tests using lots of different MAs. That way you can decide for yourself if you want to follow his system or not and you'll also probably discover that there is no one 'magical' MA that's going to ensure you're always profitable.

Your risk and portfolio management as well as position sizing and expectancy will dictate your profitability more than the use of an indicator :2twocents.
 
Yes, as KurwaJegoMac said, there is no 'magical' MA. There is nothing 'magical' about Stan Weinstein choosing a 30-week MA. Don't get too hung up on whether it's a 30-week, 25-week, 150-day, 200-day, or a SMA, EMA, WMA, or whatever. It's only a 'guide' to ensure that you're trading with the long-term trend. Note that he also suggests a 10-week MA for shorter term trades.

And also note that the book was printed over 20 years ago, and trading a different market to ours, so there is no guarantee that 30-week MA is the 'ideal' today in our market, if indeed it was ever 'ideal'.

Get yourself some good back-testing software, if you don't already have any, and test different MA's and entry and exit rules and see what appears to work best for you.
 
tech/a said:
WOW
Really???
You believe that?
Click to expand...

T/A Sorry I have not replied. Lost most of sight in right eye, can read again now.
Finally found this by going through profile.

After you watch Gillard and Swan you will believe anything! "my dry joke."

However to be truthful i use a moving average band, with an internal moving average.
This gives me three lines.
Because price and value are not the same, I use the bands to evaluate price relative
to value. This is for entry and exit. i.e. buy below value and sell above it.

As you go through the trading exercise, you learn a better way bit by bit.
As you use VSA to your advantage, your explainations will no doubt help others.

IF I had known about VSA in 2006, I would no doubt be using it today.

Since trading is associated with a price bar, (open,high, low,close) and volume it makes good sense.

Having come from Alexaner Elder's stable, I am making a transition.

When I looked at the book shops I did not find a book that was titled, "this is the only way to trade". So it's trial and error or existing plan against a better plan.
Or better still, my plan against a more profitable way to trade.

Cheers
 
Your curve fitting and you dont even know your doing it.
 
SG.
Put any stock on clean chart,(suggest SLR ), add the type of moving average and period and compare the results. i.e. 34ema, 34wma and 34sma. See which moving average fits the picture best. I use 34wma on SLR.
I always use Fibonacci numbers so it will be 34 wma and 144 or 189sma for Sams suggestion.

Each stock has its own" DNA", so its up to you to use a period that gives the best picture. I prefer 34wma and I use 13(bar) and 34(line) CCI to compliment this. But everbody to his own. With SLR you will notice how the price continually test the 34wma.
Eventually the price increases to Stage three as suggested by Sam.
With 34wma weekly chart or 144sma (daily)it broke out about 22 -23cents, retested the 34wma then moved up. My first trade was 36cents entry.(but thats another story).
Cheers
Click to expand...

Curve fitting.

Not even close to the general comment used
"To Show the Chartist the direction of the underlying trend" on page 51.

Enjoy you journey.
 

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