Question about moving average

HI,
What moving average are important in forex market and in which time frames there are work well?
Thanks

Simple answer - None and none!

i think you will find the 55ema is are technical indicator used by many traders and works well on the 15minute, 1 hour and 4 hour chart


By travpip at 2010-09-18

By travpip at 2010-09-18

I have to strongly disagree. 55 EMA, 54.32 SMA, 12 WMA all meet at the same juncture, i.e. the Central Limit Theorem.

Cherry-picking profitable trades does not negate that fundamental axiom of statistics.

I just use a 200ema and stochastics on my charts. Thats all.

Just a 200 and 50 SMA on mine. More respected on higher timeframes.

20, 100 and 200 SMA on 4H and daily charts.

Moving averages as we all know doesnt give you goo entry signals because the lag price, but they are important because they act as support ans resistance levels, and because they are good indicators of trend direction.

Absolutely.

Personally I just use the 365 EMA, useless on it’s own but it’s good as extra confirmation. It just works as support or resistance.

I only trade daily and H4 charts, and it works equally well on both.

I think my earlier posting vindicates my statement, all MAs are as useful as each other! i.e. NOT any more useful than looking at your chart!

Indeed. They are all equally useless when used as trading signals.

Moving averages react late by nature, the problem is how late.

What can happen is the moving average can signal the trade so many pips late that by the time you enter the trade, a reversal is about to occur, this reversal is then signaled by the moving average also so late that by the time you exit your trade on it, another reversal back to the original direction is about to occur.
The result is even though a legitimate, tradable and potentially profitable price move occured, the entry point and exit point differential of the trade incures a loss.
The only way this will not happen is if the price move is large enough that the late entry will not matter.

The problem is, with backtesting it can be proven that the moving averge signal will cause the losing trade scenario to occur more often than the profitable one no matter what time period moving averages you use, simply because the shorter price moves are more frequent.