200 Period Moving Average - What's the Deal?

You’re referring to 200 SMA on a DAILY chart I assume…
To be honest I can’t give a good opinion on this other than to say that while it could be a good indicator of trend, since moving averages lag a lot, you have to watch carefully for changes…
For me, my main way of determining the larger trend is an oscillator on the monthly and weekly charts. I like using a Stochastic set at (15,5,5) or a custom indicator called RSIOMA. On the monthly chart, an oscillator is a quite significant indicator. Of course, you can just observe from the chart too whether a pair is mostly consolidating or trending.

Hi webguy7,

Thanks for the tip about RIOSOMA. Stochastics confirmed a trade for me on the D1, but price is taking a serious U-turn on me, even before the profit zone. RIOSOMA, however, gave no confirmation on the trade at any time; so based on this one observation, it may be a more dependable confirmation tool. I’ll keep an eye on it.

If you needed to choose between stochastics and RIOSOMA, which would you choose? Would you care to explain why?

Thanks,
Norm

I prefer RSIOMA on longer time frames and the Stochastic on lower. Other points: The signals from RSIOMA are more reliable, but lagging more. I change the setting on RSIOMA from 14-21 to 8-12. The stochastic displays divergence more clearly than RSIOMA. It depends partly upon the pair and time frame which is works better - back-trade to see. The stochastic usually needs more reasons and help from other indicators to be reliable… Cheers!

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My mentor uses 17/53/100/200

Thanks, webguy7, for your preference and for the suggested settings change.

At this point, I’m still keeping an eye on RSIOMA, and I’ll try out your settings.

With Appreciation,
Norm