When I run a 15-minute chart its completely different to a 2-hour moving average chart; being such an important factor I can't understand why this is never mentioned when I read a book or article or interview - no one ever seems to mention what minute/hour chart they are using when they mention a simple moving average type. Is there some sort of industry standard minute/hour chart that everyone uses and which they are referring to when they mention a certain day period moving average?
Trading is about identifying patterns, where many new traders does mistakes is they keep changing indicators and periods of indicators. I like 18 sma and 92 ema (5 times 18 for longer term trend and can be considered 18 ema on five minute chart) one minute charts. I can increase contract size depending on host of perfect reasons to do so like length of swing, in other words how long is current trend based on longer average. I believe many use 21 ema, but again, it is best to just pick one, maybe two at most and never change it, learn to identify by using them what price is doing either moving away or coming back or going through to reverse trend. Like in daily bars for stocks, 200 day MA is huge by many so if you have a weekly chart, bringing down to 40 ma, moving ave should be about the same.
Remember its only an average value of previous history, not magic, but enough use to make them useable. M1, 8sma, 24sma currently but changes depending on market conditions. stock swing days, d1, 9sma, 21ema, 50sma. Remember a 10sma on a m15 is pretty much the same as a 30sma on a m5, just less accurate.
[PARTIAL------QUOTE="Handle123, post: 4157520, member: 79661"]Trading is about identifying patterns, where many new traders does mistakes is they keep changing indicators and periods of indicators. I like 18 sma ..... I believe many use 21 ema..... Like in daily bars for stocks, 200 day MA is huge by many so if you have a weekly chart, bringing down to 40 ma, moving ave should be about the same.[/QUOTE] %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% Great points; IBD[investors.com] like 50 dma[price AND volume,] ; 200 dma Money manager John Bollinger likes a 20period ma; most of money[NOT all]is made over time- NOT really 15 minutes. If you don't believe that check it out; include multI- month charts in the book , MARKET MAKER's EDGE, by MM Joshua Lukeman Wisdom is profitable to direct Thanks..............................................................................................................
It looks like you’re not around anymore povstanets, but I’m not posting this as much for you as I am to help me clarify in my own mind what I’m up to and why I’m doing it. So though some (or many) are likely to vehemently disagree with this post, my concern is not with that, but simply to get better at communicating my philosophy of trading so that I can articulate it at least somewhat coherently if ever called upon to do so. Personally, using the same set of moving averages, regardless of the timeframe one is looking at, struck me as kind of illogical almost from the beginning. Mind you, I’m not saying that it is indeed illogical. I’m just saying that this is how it struck me individually. Consequently, I abandoned this practice soon after I discovered it and chose instead to determine which moving average from each different timeframe did the absolute best job of tracking what I will call the ultimate price direction (UPD). I then plotted equivalent lines on a lower-timeframe chart so I would not have to switch back and forth between time periods, and found myself with up with up to seven moving averages, which I labeled as universal, global, intraday, hourly, short-term, fluctuating, and instantaneous trend lines. But as of this weekend however, it looks like I’m down to using four... The aqua moving average conveys the trend from a particular (higher/longer) time period. The duo of black moving averages (I count them as one) track the intraday trend, and the other two (I count the pair of orange moving averages as one also, as well as the trio of green MAs) track short-term fluctuations to assist in selecting precise entry and exit points.
I'm on 2, EMA 14 and Envelope 14 0.01 and 0.03 ( I think ) and EMA 42 and a Envelope 42 0.08 for sideways markets. Don't over complicate it, you'll end up with no trades as nothing is ever perfect.
%% And adding to the complexity; depends on chart service........ IBD[investors.com ]uses the same 200 day moving average on day + week charts. But some 200day moving averages change to 200 period, so 200 dma changes to200 5 hour period, period on 5 hour charts. I like them both; but 200 days seems to be better signals=less commissions anyway.