Moving Average Period - Preferences?

[Rockhoundnz]

What about on all the time-frames in between?

utthedoor:

Don't have any others really - 8min, but I don't use that much and 1 min, but I only have a 20 period on that.

 

[tech/a]

I use 5 and 20 period MAs on my 3 min, 15min, and 60 min charts, and an 89 period MA on my 89 tick chart.

So on "Average" how many charts do you have open at one time?

 

[CFD]

I use 5 and 20 period MAs on my 3 min, 15min, and 60 min charts, and an 89 period MA on my 89 tick chart.

What do you do with them?

One good use I've come across for shorter TFs' is to have a 12 SMA on a 5 min chart. Then you can see the speed of any move compared to an hourly TF.

 

[tech/a]

So which timeframe do you take signals from?

All your doing with screwing down timefeames is you look inside the bar.

EG
A daily bar using 60 min bars gives you 6 bars in which to determine whats happening with in that daily bar.
A 3 min time frame lets you see 20 bars within a 60 min bar to see whats happening within the 60 min bar.

I cant see why youd want to do that if your trading short timeframes.
Just pick a timeframe and trade it.
But if you think it useful placing a moving average on it will do Nothing in adding to what price action---Support/Resistance/Breakouts/Tests and volume gives you.

All timeframes have to be traded with similar risk models.
Attempting to analyse whats happening within a daily bar with a longer term view using shorter timeframes is totally useless.
It will just stuff you up.

 

[AMR]

I use MAs as "a bendy trendline". I.e I optimise the EMA until it touches the previous lows. I then use a break of the trendline as a sell signal.

 

[Rockhoundnz]

So on "Average" how many charts do you have open at one time?

Typically, I trade using 5 charts. 60 min and 15 min for overall trend and 3 min, 1 min and 89 tick charts for set-ups, entry and exit.

I use the MAs for trend confirmation on 60 and 15 min, and as potential support and resistance points.

 

[wayneL]

Typically, I trade using 5 charts. 60 min and 15 min for overall trend and 3 min, 1 min and 89 tick charts for set-ups, entry and exit.

I use the MAs for trend confirmation on 60 and 15 min, and as potential support and resistance points.

5?

Is that all?

 

[Rockhoundnz]

5?

Is that all?

Of course I do use other indicators and do look at daily and monthly charts, but for actual trading I'm only really looking at those 5 charts and have 5 and 20 period simple MAs on them all except the 89tick chart which is an 89 period exponential MA.

 

[wayneL]

Of course I do use other indicators and do look at daily and monthly charts, but for actual trading I'm only really looking at those 5 charts and have 5 and 20 period simple MAs on them all except the 89tick chart which is an 89 period exponential MA.

I find the 87 tick chart better.

I was being a bit sarcastic really. 5 charts? I find 2 plenty (time frames depend on phase of the moon, length of sunlight hours and pollen count), with the odd glance at the daily.

 

[MRC & Co]

I was being a bit sarcastic really. 5 charts? I find 2 plenty (time frames depend on phase of the moon, length of sunlight hours and pollen count), with the odd glance at the daily.

LOL!!!!!!!!!!!!

Between you and professor, I have no need to visit a comedy club!!!!!!

You may have to factor in a decimation of the pollen count though, with the fall of the honey bee!

 

[Trembling Hand]

Typically, I trade using 5 charts. 60 min and 15 min for overall trend and 3 min, 1 min and 89 tick charts for set-ups, entry and exit.

I use the MAs for trend confirmation on 60 and 15 min, and as potential support and resistance points.

Of course I do use other indicators and do look at daily and monthly charts, but for actual trading I'm only really looking at those 5 charts and have 5 and 20 period simple MAs on them all except the 89tick chart which is an 89 period exponential MA.

Surely if you are using a tick chart for trading signals the other 4 charts are just unnecessary duplication of the same price patterns. And then you have no doubt got indicators on each charts?? How do you make a trade with so many signals, are you looking for a setup on all charts at the same time?

 

[Rockhoundnz]

Surely if you are using a tick chart for trading signals the other 4 charts are just unnecessary duplication of the same price patterns. And then you have no doubt got indicators on each charts?? How do you make a trade with so many signals, are you looking for a setup on all charts at the same time?

I feel like I'm starting to repeat myself here, nonetheless let me try and make this as clear as possible. I use the longer timeframes (60 and 15 min) for defining trend, and the three minute chart for set-ups (mostly). The 1 minute and 89tick charts are used for entry depending on the type of set-up. The 60 and 15 min charts pretty much only have MAs on them, so pretty simple there really.

So, I'm stepping through them in order - looking at 15 and 60 min for trend once in a while (just takes a quick glance) and then focussing on the other 3 charts most of the time. Pretty simple really.

How about you TH?

 

[Trembling Hand]

How about you TH?

I have 20 charts on my screens.

But hardly look at any of them.

 

[prawn_86]

The forex method im demoing uses WMA's, lots of them.

As to time frames though, i only have one chart open. Some trade with 2, one to see the overall trend (say 1 minute chart) the other to execute (tick chart)

I dotn worry about the 1 min one as scalping is just in and out so the overall trend doesnt matter really, unless it is a major S/R point

 

[Rockhoundnz]

I have 20 charts on my screens.

But hardly look at any of them.

I was only talking about my main screen, I forgot about the other 3...

 

[pavilion103]

If I'm looking to hold a position between 1-4 weeks, does a 20 day MA make sense? I currently have a 15 day MA but am thinking it is too small. Is it better to maybe go even bigger?

I know it all depends, but really I just want to make sure I am looking at a MA that make sense e.g. I wouldn't use a 200 day MA for this shorter term trading.

Any thoughts would be much appreciated?

 

[Boggo]

Any thoughts would be much appreciated?

After reading Carolyn Boroden's book "Fibonacci Trading" I could see some merit in what she was saying regarding identifying and trading with the trend, she uses a 34 period EMA as a trend guide.
All my breakout scans now inhibit any results that are below the 34 EMA, I also plot it on all my charts as a quick view of the trend.

Plot it on a few stocks (even PEN for a giggle) and see what you think.

If you are doing some backtesting inhibit any signals that are below the 34 EMA based on the close and let me know if you think it changes anything. (C >= Mov(C,34,E))

http://www.fibonacciqueen.com/public/main.cfm

Cheers

 

[colion]

There are a number of ways of getting a handle on trend, including a moving average, linear regression, higher/lower highs and low, etc. However, the optimum setting for an indicator will be a function of the stock or index, the timeframe, etc. and most importantly will not be constant over time.

As i understand your note, you are using EMA(34) as a buy/sell signal. That can obviously be done but don't assume that a single setting of 34 will produce the optimum equity in your account or that it will always produce a positive return. You can check this out with software that permits you to input your system with optimization of the EMA period and output the equity change for the sample size that you choose.

I quickly looked at the EMA(34) long only system and EMA(34) tends to produce a positive return for many (not all) stocks but the results were often substantially inferior to those using an optimized period which can be quite differfent from 34.

If you like the idea of using a moving average, you might want to consider using an adaptive moving average that will adjust to changing market conditions and does not rely on a one size fits all restriction.

 

[Boggo]

All my breakout scans now inhibit any results that are below the 34 EMA, I also plot it on all my charts as a quick view of the trend.
If you are doing some backtesting inhibit any signals that are below the 34 EMA

As i understand your note, you are using EMA(34) as a buy/sell signal.

Not sure if you are referring to my post re the 34 EMA, if yes then you completely misunderstand what I am saying.

Moving averages are useless on their own.

Cheers

 

[colion]

Not sure if you are referring to my post re the 34 EMA, if yes then you completely misunderstand what I am saying.

Moving averages are useless on their own.

Cheers

If that's the case then we agree.