Yes the whole point is MA indicator and like pretty much all of the technical analysis indicators all go out of the door in the face of sudden and extreme news/economic events even though they are effective in painting a general picture of where the price is going in absence of sudden information.
the complete details of my strategy can't be explained in a nutshell. but I use ema 100 spot the direction of the trend and find a good entry point. great for trading instruments with good trend like gold, ES, cl. jpy/usd
%% WELL OK, dont know if all ma crossovers are useless; i tested so many, i quit, for something better.LOL And I dont consider it a big problem; but not all want to wait 200 days in the new year- that's about 7 months
Many people use moving averages in the currency market. Especially EMA14 and EMA50. You could use EMAs for several things, for example you can open a position if price respects EMA14 in M15 after a move in the direction of the trend. Best regards Henrik Thorstensson
"Many people" do a lot of things. "Many people" are usually wrong. If you are already trading in the direction of the trend why do you need anything else, especially something backward looking?
They're useful (not essential) as a yardstick in gauging one trend against another. So e.g. you can tally how many consecutive weekly bars have been unbroken by the 50EMA, how many consecutive weekly closes have been above the 50EMA, how many weekly H/L/C's have been above the 50EMA in the last x months, etc. etc. Using some parameters relevant to your strategy will allow you to rank or score trends on different charts, helping prioritise opportunities.
Indeed ... exactly so. Hmmm, and that's the market with by far the highest proportion of losing retail traders, isn't it?
It doesn't prove it; but it certainly begs the question. In practice, though, it's one of many (often indicator-based) aspects of retail forex-trading that explains why that's the market with by far the highest rate of losing retail traders, for the reasons explained here: my point is that those are also typically the traders most attracted to the apparent simplicity of indicators; they tend, collectively, to ascribe to them "predictive" attributes which objective research reliably demonstrates they simply don't have. The reality is that, like so much else, it depends how they're used. Retail forex traders certainly tend, overall, to be the ones using them as a basis for entering trades (rather than for directional bias), and that's a mugs' game.