EMA & SMA Timeframes

Discussion in 'Technical Analysis' started by McLeary, Sep 9, 2018.

  1. McLeary


    Can someone point me out in the right direction with using SMA and EMA and which period average should be used for which timeframe ?

    What are the most common settings that everyone usually goes with while day trading?

    Thanks in advance
  2. tommcginnis


    Your implicit premise is that reality will comport to the right formula or algorithm (instead of *searching*for* the right math to match reality de'jure), and in that, you are completely screwed.

    YOU must instead search for the right math to match the reality before you, AND you must keep a constant eye on your results, because ALL such results are preliminary. Always.

    So, *ignore* what "everybody else" does, because few actually apply any sort of 'science' to their numbers. Perhaps 1-in-25 who read this, have ever actually modified the 12-26-9 settings on their MACD -- fewer than 1-in-100 have ever actually bothered themselves to know what those settings mean. BUT THE MAJORITY will moan about how "the MACD doesn't work." Do you want to join them?

    Work some numbers. Figure out what an SMA of various look-backs does. Figure out what an EMA does. LOOK AT YOUR UNDERLYING. Which *should* match better? Work some more numbers. Which *does* match better? THAT'S THE ONE YOU WANT, keeping in mind the first bit: all such results are preliminary, subject to check, "YMMV" etc etc.

    And at that point, when idiots moan about technical studies 'not working', you'll know what homework they have not done, ever, in their past.
    Last edited: Sep 9, 2018
  3. oh man the fountain of youth question. What i do is have one large chart on my screen where i have a tons of ema's and sma's then i throw different tickers into it and click thru different timeframes. different stocks like different ma's for different timeframes. they are all lagging indicators so i just use them to help with trends and possible places to scale in or out of trades. I personally trade off the 5m chart a lot and like the 8ema for that. i also use vwap a bit and a 200sma. when i am looking at bigger picture on daily chart i like 200, 50 5 sma's. Bottom line, just play with them all and look for something that works for you. I was taught by a very well regarded quant years ago that the algo's used the 5m8ema quite a bit. not sure if it was true then and still true or whatever. but i use and like it. i look for 5m candle to close above or below it often for a good sign of reversal. also like looking at 8/20 crosses etc. it goes on and on. i would focus more on watching the tape and volume price action
    Last edited: Sep 9, 2018
    tommcginnis likes this.
  4. speedo


    Think of it like a trip to the optometrist...play with settings until things come into focus.
  5. Then realize its all a mirage.
    ElectricSavant likes this.
  6. Let me save you some trouble, useless stuff.
  7. That's actually a pretty good analogy. And it also depends on how they're used.

    But, of course, the correct answer to the question is 7. And if you wear Odor Eaters, they should be beige.
  8. They can be a useful and convenient reference point and not necessarily signal generators.
    S-Trader, treeman, tomorton and 2 others like this.
  9. speedo


    tommcginnis likes this.
  10. treeman


    Certainly not useless. Not that any trader listens to anyone except themselves.
    #10     Sep 10, 2018