Why do moving averages SUCK so much?

Discussion in 'Technical Analysis' started by Saltynuts, Feb 21, 2021.

  1. Nobert

    Nobert

    The best indicator of shit storm be like :

    ,,..mortgage your hause & all in long"
     
    #11     Feb 22, 2021
    zghorner likes this.
  2. traider

    traider

    Because market is generally efficient. Simple things won't make you millions.
     
    #12     Feb 22, 2021
  3. easymon1

    easymon1

    Maybe Google knows why...
     
    #13     Feb 22, 2021
  4. thursday

    thursday

    You have to understand that most indicators are not accurate when the market are on the ride. They can help you to do a reading better but you cannot rely on just that.
     
    #14     Feb 22, 2021
  5. speedo

    speedo

    MA's do exactly what they are supposed to do. Whether you use them or if you do, how you use them is up to you. No derivative will turn you into a good trader.
     
    #15     Feb 22, 2021
  6. Moving Averages Bottom Line... Yes, they do suck most of the time. In general, a waste of time to try to make a trading system out of them. (What does that say for MACD? Yes I know... somebody will say a "move was confirmed by MACD"... but any trader worth his salt should have seen the play long before the MACD Cross. I think of it this way... "MACD = a moving average of something that sucks.")

    Except... the 50 and 200 day MAs often work as support/resistance.... that's why most traders keep an eye on them. Sometimes they don't work as S/R... the price moves back and forth across one or both of them like they aren't even there. At such times, traders should ignore them for now but keep an eye on for later when they once again act as S/R.
     
    Last edited: Feb 22, 2021
    #16     Feb 22, 2021
    Axon likes this.
  7. A moving average can be considered a summary of price action. A range bar can also be considered a summary of shorter time frames. In other words, a moving average can be looked at as a summary of a summary. A trading system consisting of entries and exits solely on moving averages should not provide an edge. However, moving averages on a shorter time frame, when used in context of a longer time frame, especially when combined with another trading methodology, may have some value in filtering short term “Noise” from potentially “Significant” signals in an attempt to use tighter money management based on the shorter time frame while attempting to profit from the larger price range of the longer time frame.
     
    #17     Feb 22, 2021
    .sigma and Poljot like this.
  8. variance ratio. you hacks are so funny , zero mathematical sophistication
     
    #18     Feb 22, 2021
  9. zghorner

    zghorner

    whatever nerd...all the cool kids lose money constantly.
     
    #19     Feb 22, 2021
  10. Arnie

    Arnie

    There's a passage from a book on trader's (Market Wizards?) where one trader says (paraphrasing)..."throw your charts on the floor and jump up your deck and look at them. If they are going up, buy, if they are going down, sell"
    It amazes me to no end that "traders" try to find perfection where none exists.
     
    #20     Feb 22, 2021