Which MA Does The Street Use?

Discussion in 'Technical Analysis' started by ess1096, Jun 23, 2007.

  1. ess1096

    ess1096

    SMA or EMA?

    By "the street" I mean the real money that moves markets.
    Friday's close (S&P 500) is under the 50 day SMA but looks great using the 50 day EMA as support.
     
  2. the "200" babe is golden :cool:

    don't trade off-it, anticipate it1.thats the ticket
     
  3. ess1096

    ess1096

    200 day Ema or Sma?

    I like to watch the 50 day and know where the 200 day is. But if a position I'm watching is looking for support from the 200 day it usually means I've let my position go too far. :(
     
  4. yes
     
  5. Lucrum

    Lucrum

    I'm not a particularly big fan of MA's myself. In fact the only MA's on my charts are of volume, so I'll know what's average.

    In practically any discussion of MA's you'll see 20-21, 50-55 and 200 periods mentioned. The 20 day MA I can sort of see, it does represent more or less the number of trading days in a month.
    I have no idea where the numbers 50 and 200 came from. Although they are watched by enough market participants that even if they have no intrinsic value in and of themselves. There probably is at least some thing of a self fulfilling prophecy effect.

    Personally I would have thought a 60 day MA (approximately one quarter) and 240- 250 day (approximately one year) would have made more sense than 50 or 200. But then 50 and 200 were already in wide spread use long before I started and will likely persist long after I'm done.

    As for simple or exponential. Particularly on daily charts I would lean toward the simple MA myself but then I'll admit I'm something of a traditional kinda guy.
    As far as what "the street" is looking at, I honestly don't know. I'm guessing there are fewer pros looking at these than you think. And the one's that still do use them are probably the older guys who, out of shear habit if nothing else, probably use simple more than exponential.

    In the end I would suggest playing around with various periods as well as types of MA's on the time frames and markets you'll be watching and see what works best for YOUR trading style.
    Ultimately that's far more important than what anyone else is doing.
     

  6. the question should be "does the street use MA's or TA at all, outside of their marketing departments?" the word "moving" in the term, tells one all they need to know, if you think about it objectively.

    best wishes,

    surf
     
  7. ess1096

    ess1096

    It looks like it was the Ema, and apparently SOMEBODY pays attention to it. :D
     
  8. PetaDollar

    PetaDollar Moderator

    MAs and other trendlines are cute appliances. Price and previous price levels are the root. You can use the appliances to make money, but more effective (and more fun, IMO) is to use the root. Spend a week looking at Google stock msg boards. All the masses care about is the price. They get emotionally involved with price levels. Fifty is cheap, 60 is too much, 45-- what a bargain. What??? Why is it droping below 45??!?!? I bought 200 calls with a strike of 55!!
     
  9. ===========
    Ess109;
    Having looked @ both, worked with both;
    would say ''yes'' on real money /50dmaquestion

    HOV is under 50 dma [all,] 200dma [all];
    mechanical trader could very well be short SPY, not me, too many uptrends . Could make a good short term move either way, most trends /probibility are up, med/ long term.

    :cool:
     
  10. ===========
    Ess109;
    Having looked @ both, worked with both;
    would say ''yes'' on real money /50dma question

    HOV is under 50 dma [all,] 200dma [all];
    mechanical trader could very well be short SPY, not me, too many uptrends . Could make a good short term move either way, most trends /probibility are up, med/ long term.

    :cool:
     
    #10     Jun 28, 2007