What moving average is this?

Discussion in 'Technical Analysis' started by forextrades, Aug 29, 2006.

  1. I do not think that is a moving average. It looks like a line connecting the closing prices of the bars marked by blue dots and red dots.
  2. I meant the blue line in the middle, not the dotted line.
  3. I studied those charts posted by ETLurker for some time. His described method seems very logical and straightforward (ableit lacking in some important details).

    That may not be a moving average at all, but instead a different type of function (regression analysis?) because it steps up and down, rather than moving smoothly. It seems to be calculated with a very short period, and be shifted to the right a couple bars.

    What are your thoughts on the general method he describes?

  4. I was thinking the same thing. It has to be linear regression. I have an indicator that does something similar in a different charting program, but I may need to reprogram it.

    As you said, his method seems very logical, but there are a few things that I don't understand. Take this chart for example:


    You could see that his system shorts at 10:45. The ES then makes a lower low. According to his system, shouldn't he have reversed his position and went long when price touched the bottom band at 11:05? Since price penetrated the lower band, he states that he should be looking to sell pullbacks to the center line and take profits and go long on the bottom line.

    He obviously left something important out here as his rules seem to change when the market is trending. Maybe someone else could shed some light on this.