Lets discuss techniques for smoothing MAs

Discussion in 'Technical Analysis' started by IronFist, Sep 26, 2008.

  1. Say you've got a moving average that's so fast it melts your face, but it's not the smoothest MA in the world?

    How do you smooth it?

    Here's my super fast MA after I smoothed it, but it could be smoother. It's the light blue one in this pic. The pink one is a 5 period EMA (OHLC/4), for reference.

    <img src=http://elitetrader.com/vb/attachment.php?s=&postid=2091334 width=800>
  2. Here's what I would do.

    Get rid of the moving averge and then take a look at a candlestick for "x" period of time in both it's regular candlestick formation and in its heikin-ashi style formation as well.

    What do you see?
  3. Let's discuss free techniques for smoothing MAs :D
  4. Heikin Ashi is cool BUT misleading because you're not looking at price.

    I remember the first time I loaded HA candles on accident... I was like "OMG HOLY GRAIL!" :D
  5. Read up on HMA. It corrects much quicker than EMA and esp. SMA's.

    Disclaimer: I don't use MA's anymore I believe them to be lagging just like indicators. If they work for you great.
  6. kut2k2


    My takes:

    - You didn't name the argument for your MA. Is it also ohlc/4?

    - The two MAs seem to peak and trough at the same speed, but your MA has less attenuation, which is a plus as a rule.

    - Avoid the HMA. It overshoots. The last thing you want in a smoother is overshooting.

    - Think about adaptive smoothing, if you're not doing that already.
  7. I will save you the trouble.

    Moving averages provide NO edge.
  8. Longer term averages.
  9. piazzi


    how about a weighted moving avereage, it is standard, and free :)

    you can change weight parameters to get a better weighting for a specific market

  10. piazzi


    and I agree with that, they are, like other technical indicators, tools to employ to study a market

    #10     Sep 27, 2008