Difference of two SMA Length as momentum

Discussion in 'Technical Analysis' started by Carneros8, Nov 9, 2018.

  1. Carneros8


    does anyone here use the difference of two SMA periods as a gauge of momentum? For example, the difference in ticks of the classic 20SMA and 50SMA for trend direction and momentum?
  2. lindq


    Keep it simple. Measure the slope of a simple MA, and that's your momentum.
    tomorton and userque like this.
  3. This is called the MACD indicator: https://www.investopedia.com/terms/m/macd.asp
    _eug_ likes this.
  4. Handle123


    As durations get smaller, in my backtesting, the parameters for MACD should increase for intraday trading or have tons of false signals. And entries should wait for retracements, the crossing of %K and D show a possible trend change but often at extreme of recent trend change and often a retracement occurs.
    HobbyTrading likes this.
  5. I have similar experiences with MACD. I don't use it intensively and if I do use it then only for longer time horizons (days or weeks).
    Handle123 likes this.
  6. Handle123


    Yes, I like it on weeks mainly whether commodities or stocks, but use it as way to confirm extremes. It does do a nice job for intraday like one minute bars, but have to double values of what is standard, as it allows to show beginning of trend but not right there to enter, best to wait for 50% pullback, then risk is cheaper.