Hello,
I was reading about the EMA’s and SMA’s (standart and exponential moving averages) and I was wondering what numbers you use.
Often you can see figures like 200 day moving average, or 50 day moving average but I was wondering if there are some “standarts” that are proven to be useful?
Kind regards
Chris
It depends on the interval I’m looking at. The smaller the time frame, the smaller the period. For daily, I like the 25 period as a general rule in identifying the bigger picture. For hourly, I prefer 8, 10, or 15. There isn’t a golden standard on this though, especially as each market is going to warrant a different period because of differing volatility.
I am not looking for a general trend line or just one MA.
The question was more about the combination of 2-3 MA’s to have trading signals.
For example creating some rules of thumb like “When the 50 day SMA crosses the 200 day SMA from the bottom to the top and the 100 day EMA shows a upwards trend, then it might be a good long position indicator.”
(the rule is completely made up by me)
But I guess many traders have rules like this and verify them with other indicators.
Oh, I see. I apologize for the misunderstanding. I did a lot of research on the MA crossover’s and found nothing worth pursuing. The test I did was along the lines of “When the 5ma crosses over/under the 10ma” in order to see how the bars do after the cross over and after the cross under. I did this for all variations of the Simple Moving Average up to 200 (using ma 5, then ma10, then ma 15, etc) in the 5, 15, 30, hourly, and daily intervals. Yes, it took a little while, but I didn’t find anything that was a strong strategy for me.
Of course, that study was done solely in the EURUSD. There could be excellent strategies using this technique in other markets, just nothing stuck out in the EURUSD.
So probably it will be a good additional indicator along the Bollinger or Ichimoku to make sure that you are not trading completely against the trend.
I am completely new to FX, so I have to learn a lot. 
DivineLuckBox:
Unfortunately, when it comes to MAs or EMAs (or any other MAs for that matter) there is no single ‘magic number’. You have indeed noticed the 50-day and 200-day MAs (or EMAs). These are indeed a de facto standard used by equity and commodities traders to indicate LONG TERM support or resistance but trading the crossover of these two particular MAs will not make you any money unfortunately. If only it was that simple!!! LOL!!!
I’ve done a fair amount of work with MAs. The general consensus (at least among professional traders) is that any MA used should be equal to one-half the period under review e.g. 14-days is ROUGHLY half a month. That type of thing. In my experience the most ‘popular’ values (once again used by the professionals) are somewhere in the regions of 13, 14, 26, and 28, and, of course, the well known 50 and 200 (DAYS that is). But there are as many variations as there are books on the subject unfortunately. Some say that one should ‘offset’ whatever MA you’re using by X number of bars ‘into the future’ (see Bill Williams’ Alligator indicator for example i.e. the ‘jaw’ of the Alligator or ‘Balance Line’ as he calls it). Unfortunately as with ANY trading system or indicator: there’s only ONE way to see if you’re using the ‘correct’ or profitable parameters and that’s simply by PAPER-TRADING the trading system or indicator. And I DO MEAN PAPER-TRADING with PEN (maybe pencil) AND PAPER!!! Do NOT think that you’re going to ‘plug’ a few MA values into MetaTrader’s EA / testing module and then use the ‘optimize’ feature to come out with a set of ‘optimum values’. It just does not work that way unfortunately (not with MT4 or even with some of this very expensive, all ‘bells and whistles’, backtesting software that’s available usually at ridiculous prices too). Unless you’re related to somebody in office at Goldman Sachs and have access to some of their high frequency trading algorithms: there’s only one way and that’s ‘the hard way’!!! LOL!!!
Regards,
Dale.
Exponential Moving Average (EMA) is similar to Simple Moving Average (SMA), measuring trend direction over a period of time. However, whereas SMA simply calculates an average of price data, EMA applies more weight to data that is more current. Because of its unique calculation, EMA will follow prices more closely than a corresponding SMA.
Bump a 9yo thread, sure the op is grateful for your timely responce