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| Meta Title | Moving Averages-simple or exponential | Page 2 | Elite Trader |
| Meta Description | I have tried most types of ma's and think the choice for ema, sma of whatever is less important than sticking to it. But in my opinion the best way to... |
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| Boilerpipe Text | I have tried most types of ma's and think the choice for ema, sma of whatever is less important than sticking to it.
But in my opinion the best way to use ma (I use 20 period simple) to enter the first pullback after a price crossover and a subsequent change of slope or at least a flattening of the previous ma-trend.
the simple moving average clarifies trend. nothing more, nothing less. it is ALL one needs.
surfer
Here is a chart of moving averages of the NQ contract using 40-tick bars or at intervals, on average, of half a minute. The purple MA is a 20-EMA, red is a 100-SMA, green is a 200-SMA, yellow is a 400-WMA (weighted), and light blue is a 600-WMA. Notice the way price is supported by, then bumps up against and is trapped between the various MA's in this transition from downtrend to uptrend. Cool.
Bruce
ma's.gif
ma's.gif
21.4 KB
· Views: 281
Appreciate the comments, sounds like no significant preference for one or other. I use EMA, 10, 20, 40, along with volume and ADX as sole criteria. If there is a trend, I trade it, if not, forget it. Have had great success with that of late. Most important is still a feel for market which comes from having done this forever.
Quote from Neil:
Hi Nihaba,
Are you.. and others here.. referring to 'price' crossovers of ma's or ma crossover ma? Just seems to me that price crossovers are giving signals way too often while working on different time frames and selection of ma's to use.. as this thread is about... ie simple, exponential or weighted...can produce vastly different results from the same situations...
and again, with a compatable secondary signal to further filter down the signals to act upon..
Neil
Hi Neil,
Good question...
I am
referring to moving average crossing over another moving average.
Also...I've used simple, weighted and exponential in the past and have felt
comfortable
with exponential moving averages for the past 6 years.
One has no advantage over the other...I just use what I feel comfortable with.
And yes...always a good methodology to have confirmation via another indicator or price action pattern.
Good night.
NihabaAshi
Definatly EMA if you watch the SMA you are going to get so much noise, and more likely jump in at a bad entry. From a statistical standpoint I see EMA as a better indicator. To play devils advocate though.. I personally would not just trade one set of indicators... your asking to get burned.. and also you got to remember that there is a discretionary element to trading.
good luck with your trades,
Few of you have mentioned " confirmation indicators " .
Would you post which one's you consider to be most useful ?
I personally like to use stochastics and trendlines.
Walter
Quote from Walther:
Few of you have mentioned " confirmation indicators " .
Would you post which one's you consider to be most useful ?
I personally like to use stochastics and trendlines.
Walter
Walter,
At the moment I am using cci indicator to confirm my signals.. which are, as NihabaAshi above says, ma crossing ma... I am still working on my exact parameters but this so far is working best... the cci is a little faster than the ma's at present settings but often preps me up for a entry/exit.. working good for a while and gives me average 4-5 trades per day.. thats trading QQQ..
Neil
A big drawback of the SMA is how it is affected by price jumps. The SMA's memory is only limited to the lookback period. If there was a huge move 20 days ago, when you calculate your 20 period SMA tomorrow there will be a big jump in the SMA as this observation is removed from the sample. On the other hand, the EMA will not show such a jump as all previous data is weighted in the calculation.
It is a bit hard to explain, the best thing to do would be to create an artificial time series, put a huge spike in the middle of it, and look at the differences between the SMA and EMA.
For this reason I think the EMA is superior, but in reality it probably does not make much difference.
Neil,
What setting do you use for QQQ ? 4-5 good signals a day is great.
Thanks,
Walter |
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# Moving Averages-simple or exponential
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[O](https://www.elitetrader.com/et/members/opw.10508/)
#### [opw](https://www.elitetrader.com/et/members/opw.10508/)
I have tried most types of ma's and think the choice for ema, sma of whatever is less important than sticking to it.
But in my opinion the best way to use ma (I use 20 period simple) to enter the first pullback after a price crossover and a subsequent change of slope or at least a flattening of the previous ma-trend.
[Feb 23, 2003](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208488)
- [\#11](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208488)
[M](https://www.elitetrader.com/et/members/marketsurfer.10405/)
#### [marketsurfer](https://www.elitetrader.com/et/members/marketsurfer.10405/)
the simple moving average clarifies trend. nothing more, nothing less. it is ALL one needs.
surfer
[Feb 23, 2003](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208498)
- [\#12](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208498)
[B](https://www.elitetrader.com/et/members/bdixon619.12588/)
#### [bdixon619](https://www.elitetrader.com/et/members/bdixon619.12588/)
Here is a chart of moving averages of the NQ contract using 40-tick bars or at intervals, on average, of half a minute. The purple MA is a 20-EMA, red is a 100-SMA, green is a 200-SMA, yellow is a 400-WMA (weighted), and light blue is a 600-WMA. Notice the way price is supported by, then bumps up against and is trapped between the various MA's in this transition from downtrend to uptrend. Cool.
Bruce
#### Attachments
- ma's.gif
21\.4 KB · Views: 281
[Feb 23, 2003](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208585)
- [\#13](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208585)
[T](https://www.elitetrader.com/et/members/tg.9443/)
#### [TG](https://www.elitetrader.com/et/members/tg.9443/)
Appreciate the comments, sounds like no significant preference for one or other. I use EMA, 10, 20, 40, along with volume and ADX as sole criteria. If there is a trend, I trade it, if not, forget it. Have had great success with that of late. Most important is still a feel for market which comes from having done this forever.
[Feb 23, 2003](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208592)
- [\#14](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208592)
[N](https://www.elitetrader.com/et/members/nihabaashi.9117/)
#### [NihabaAshi](https://www.elitetrader.com/et/members/nihabaashi.9117/)
> *Quote from Neil:*
>
> **Hi Nihaba, Are you.. and others here.. referring to 'price' crossovers of ma's or ma crossover ma? Just seems to me that price crossovers are giving signals way too often while working on different time frames and selection of ma's to use.. as this thread is about... ie simple, exponential or weighted...can produce vastly different results from the same situations... and again, with a compatable secondary signal to further filter down the signals to act upon.. Neil**
>
> [More...]()
Hi Neil,
Good question...
**I am** referring to moving average crossing over another moving average.
Also...I've used simple, weighted and exponential in the past and have felt **comfortable** with exponential moving averages for the past 6 years.
One has no advantage over the other...I just use what I feel comfortable with.
And yes...always a good methodology to have confirmation via another indicator or price action pattern.
Good night.
**NihabaAshi**
[Feb 24, 2003](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208664)
- [\#15](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208664)
[C](https://www.elitetrader.com/et/members/chaosnsx.15307/)
#### [ChaosNSX](https://www.elitetrader.com/et/members/chaosnsx.15307/)
Definatly EMA if you watch the SMA you are going to get so much noise, and more likely jump in at a bad entry. From a statistical standpoint I see EMA as a better indicator. To play devils advocate though.. I personally would not just trade one set of indicators... your asking to get burned.. and also you got to remember that there is a discretionary element to trading.
good luck with your trades,

[Feb 24, 2003](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208667)
- [\#16](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208667)
[W](https://www.elitetrader.com/et/members/walther.13723/)
#### [Walther](https://www.elitetrader.com/et/members/walther.13723/)
Few of you have mentioned " confirmation indicators " .
Would you post which one's you consider to be most useful ?
I personally like to use stochastics and trendlines.
Walter
[Feb 24, 2003](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208685)
- [\#17](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208685)
[N](https://www.elitetrader.com/et/members/neil.7943/)
#### [Neil](https://www.elitetrader.com/et/members/neil.7943/)
> *Quote from Walther:*
> **Few of you have mentioned " confirmation indicators " . Would you post which one's you consider to be most useful ? I personally like to use stochastics and trendlines. Walter**
>
> [More...]()
Walter,
At the moment I am using cci indicator to confirm my signals.. which are, as NihabaAshi above says, ma crossing ma... I am still working on my exact parameters but this so far is working best... the cci is a little faster than the ma's at present settings but often preps me up for a entry/exit.. working good for a while and gives me average 4-5 trades per day.. thats trading QQQ..
Neil
[Feb 24, 2003](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208693)
- [\#18](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208693)
[Z](https://www.elitetrader.com/et/members/zentrader.7823/)
#### [zentrader](https://www.elitetrader.com/et/members/zentrader.7823/)
A big drawback of the SMA is how it is affected by price jumps. The SMA's memory is only limited to the lookback period. If there was a huge move 20 days ago, when you calculate your 20 period SMA tomorrow there will be a big jump in the SMA as this observation is removed from the sample. On the other hand, the EMA will not show such a jump as all previous data is weighted in the calculation.
It is a bit hard to explain, the best thing to do would be to create an artificial time series, put a huge spike in the middle of it, and look at the differences between the SMA and EMA.
For this reason I think the EMA is superior, but in reality it probably does not make much difference.
[Feb 24, 2003](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208694)
- [\#19](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208694)
[W](https://www.elitetrader.com/et/members/walther.13723/)
#### [Walther](https://www.elitetrader.com/et/members/walther.13723/)
Neil,
What setting do you use for QQQ ? 4-5 good signals a day is great.
Thanks,
Walter
[Feb 24, 2003](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208740)
- [\#20](https://www.elitetrader.com/et/threads/moving-averages-simple-or-exponential.14319/post-208740)
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| Readable Markdown | I have tried most types of ma's and think the choice for ema, sma of whatever is less important than sticking to it.
But in my opinion the best way to use ma (I use 20 period simple) to enter the first pullback after a price crossover and a subsequent change of slope or at least a flattening of the previous ma-trend.
the simple moving average clarifies trend. nothing more, nothing less. it is ALL one needs.
surfer
Here is a chart of moving averages of the NQ contract using 40-tick bars or at intervals, on average, of half a minute. The purple MA is a 20-EMA, red is a 100-SMA, green is a 200-SMA, yellow is a 400-WMA (weighted), and light blue is a 600-WMA. Notice the way price is supported by, then bumps up against and is trapped between the various MA's in this transition from downtrend to uptrend. Cool.
Bruce
- ma's.gif
21\.4 KB · Views: 281
Appreciate the comments, sounds like no significant preference for one or other. I use EMA, 10, 20, 40, along with volume and ADX as sole criteria. If there is a trend, I trade it, if not, forget it. Have had great success with that of late. Most important is still a feel for market which comes from having done this forever.
> *Quote from Neil:*
>
> **Hi Nihaba, Are you.. and others here.. referring to 'price' crossovers of ma's or ma crossover ma? Just seems to me that price crossovers are giving signals way too often while working on different time frames and selection of ma's to use.. as this thread is about... ie simple, exponential or weighted...can produce vastly different results from the same situations...and again, with a compatable secondary signal to further filter down the signals to act upon..Neil**
Hi Neil,
Good question...
**I am** referring to moving average crossing over another moving average.
Also...I've used simple, weighted and exponential in the past and have felt **comfortable** with exponential moving averages for the past 6 years.
One has no advantage over the other...I just use what I feel comfortable with.
And yes...always a good methodology to have confirmation via another indicator or price action pattern.
Good night.
**NihabaAshi**
Definatly EMA if you watch the SMA you are going to get so much noise, and more likely jump in at a bad entry. From a statistical standpoint I see EMA as a better indicator. To play devils advocate though.. I personally would not just trade one set of indicators... your asking to get burned.. and also you got to remember that there is a discretionary element to trading.
good luck with your trades,

Few of you have mentioned " confirmation indicators " .
Would you post which one's you consider to be most useful ?
I personally like to use stochastics and trendlines.
Walter
> *Quote from Walther:*
> **Few of you have mentioned " confirmation indicators " . Would you post which one's you consider to be most useful ? I personally like to use stochastics and trendlines. Walter**
Walter,
At the moment I am using cci indicator to confirm my signals.. which are, as NihabaAshi above says, ma crossing ma... I am still working on my exact parameters but this so far is working best... the cci is a little faster than the ma's at present settings but often preps me up for a entry/exit.. working good for a while and gives me average 4-5 trades per day.. thats trading QQQ..
Neil
A big drawback of the SMA is how it is affected by price jumps. The SMA's memory is only limited to the lookback period. If there was a huge move 20 days ago, when you calculate your 20 period SMA tomorrow there will be a big jump in the SMA as this observation is removed from the sample. On the other hand, the EMA will not show such a jump as all previous data is weighted in the calculation.
It is a bit hard to explain, the best thing to do would be to create an artificial time series, put a huge spike in the middle of it, and look at the differences between the SMA and EMA.
For this reason I think the EMA is superior, but in reality it probably does not make much difference.
Neil,
What setting do you use for QQQ ? 4-5 good signals a day is great.
Thanks,
Walter |
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