Yeah, sorry, wasn’t really to question for you, just a general reader reply.
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There are no General readers, here: the highest rank is Captain reader and even those are in short supply (though this thread’s done well, admittedly). 
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Hi, these are my 2 cents as I learned them from my mentor. Hope it helps you.
First, moving averages work very well when the market is trending and they capture trends only after the trends have begun, cause they are a lagging indicator. So you could see trends forming before MAs tell you so. And you can’t use them in lateral markets. This is normal. Secondly, in order to use them to know when there is a trend, I plot three MAs (a slow one, a medium one and a fast one, see further for the period). When they are aligned (fast above medium above slow one) and the price is above the fast one, there’s an uptrend. If price is far from MAs and the three MAs are wide open and the slope is moderate (not too vertical nor too horizontal… sorry, I don’t know how to say it better!), the trend is probably strong.
The opposite for the downtrend.
As for the period of the MAs, I have been taught to try and try and try again myself until I find the ones that match better with my TF (e.g., 200 is too slow for me cause I use a very small tf), my mentor says that the most important thing is not the period but that when you find the good setup and the best period you must keep it consistently for a long time, so you will know if it’s working for your needs.
Hope this can help you.
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Hi @MattyMoney,
Please forgive my unsolicited but hopefully constructive criticism of your chart analysis. I believe you are missing one very critical piece of information.
Yes, this overly simplistic catchphrase ignores some very critical details missed by the majority of traders:
- trend… which trend? There are multiple trends in different timeframes happening at once and it’s important to understand which trend is which
- uptrend = higher highs / lows, downtrend = lower highs / lows. Seems simple enough, except how do you identify which high / low belongs to which trend?
Traders who don’t understand these points above will get confused and lost in the fractal nature of market movements. They end up struggling and often complain that trend analysis feels “subjective”.
The Power of an SMA
As I stated countless times, moving averages are the best indicators on the planet. They are however misunderstood and misused by the majority of traders.
Two humble SMAs can change your trading life. Take a 10 period SMA (I even smooth it out by 5 periods) and slap it on a chart. There are your highs and lows correctly identified for the timeframe. Then add a 2nd SMA for the next higher timeframe, e.g. for a daily chart => 10 week SMA = 50 day SMA. The 2nd SMA will correctly identify the correct highs and lows for the larger / dominant trend.
Don’t worry about them being “laggy” as we are not using them for trading signals but for their intended purpose: technical analysis
Let’s start with WTIC:
I have 3 SMAs here, red for the chart timeframe (weekly) showing the intermediate trend, yellow for the next higher TF(monthly) showing the long term trend and blue for an even higher TF (quarterly) showing secular trend. What they together show is WTIC’s first leg out of a secular bottom (blue SMA flattening and starting to turn up), then a pullback and a sideways consolidation. The blue SMA suggests that the ongoing move down may not last very long, i.e. a fake breakout in making.
GBPUSD
I agree with your GBPUSD chart and the trends are obvious enough to easily identify.
EURJPY
EURJPY similar to WTIC, uptrend then pullback and consolidation. The yellow intermediate SMA is however suggesting an emerging intermediate bull trend.
GBPJPY
Consistency in trading starts with consistency in analysis. GBPJPY was a bit more complicated in that there was a long term downtrend (as shown by yellow SMA) that was broken, suggesting that this pair is on the verge of a long term uptrend.
In my opinion, your trend channel started on the “wrong” high as it was part of the previous downtrend. The intermediate yellow SMA shows where the intermediate uptrend actually started, which gives a much steeper upslope and a much earlier signal of trend change. The slope of the of the 2nd higher TF SMAs also provides a great guideline for the “correct” slope of a trendline or channel.
It’s unfortunate that so many amateur traders dismiss moving averages as useless when really they are misunderstood and misused, in my opinion.
Hope this was helpful.
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I’m always open to constructive criticism, in fact I encourage it for the very reason you’ve stated above (as I type this from my desk, on my lunch break).
I sometimes question whether or not I should even be giving advice on public forums, but then I read 80% of the other comments and feel that yes, I should step in and give my __cents (I’ll let you fill in the worth).
I have recently adopted this method after studying some of your past posts (but did not apply it to my analysis above), except I’m using slightly different periods; a 20 SMA and a 10 SMA on the daily TF’s. The 20 represents the high/lows on the daily chart and the 10 represents the high/lows on the 4H chart (a 10 SMA daily is similar to a 20 SMA on the 4H chart). Hope that makes sense. However, I’m going to look at making some adjustments to align more with your suggestions, to capture the bigger picture.
This is a new concept for me and I’m guessing the rest of the community as well since this is the first I’ve actually heard of it. Maybe because most of the members are trading short-term?
I’ve noticed this and am wondering how?
Again, I appreciate the feedback. Keep it coming.
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I’ll just add one more example here.
I posted these 2 charts on Jan 12th, 2025:
The “Average IC declines” price targets in both charts are derived from cycles theory using SMAs.
These targets were hit in both indices as the charts below show. We can expect price to find support soon and make an intermediate term bounce for a run upwards that will last a few weeks. Here’s S&P500:
And here’s Nasdaq100:
The moral of the story is that even the “laggiest” indicator when used properly can not only analyze distinct multiple trends in one chart but can also forecast future price movements. SMAs can also show momentum, divergence and a whole bunch of other stuff but let’s leave that for another time. 
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@MattyMoney, don’t undervalue your contribution to this community. There are many members that appreciate your advice.
Yes, makes sense. I prefer to start on the smallest timeframe and make longer SMAs to cover the larger timeframes, simply because longer SMAs have less noise and tend to be more accurate.
Also I prefer to have scale difference of 3 to 6 between timeframes:
- 1 day to 1 week = 5 days (SMA10 on daily TF and SMA50 on daily TF to represent weekly TF)
- 4 hour to 1 day (for 24 hour markets like forex) = 6 x 4H candles (SMA10 on 4H and SMA60 on 4H to represent daily TF)
- 1 hour to 1 day (for 6.5 hour markets like equities) = 6.5 x 1H candles (SMA10 on 1H TF and SMA65 on 1H TF to represent daily TF)
Hope that made sense.
It’s not so much a new concept, but rather a more objective way to see trends and highs / lows in a given timeframe. Consistent trading starts with consistent analysis => consistent analysis means analyzing in the same objective manner each and every time.
It also doesn’t need SMAs, it can be any indicator that marks out highs / lows in a consistent objective manner for a given timeframe, e.g. ZigZag
When it comes to trends, the fractal nature of the markets make analysis much more complex than what mainstream trading advice portrays. Mainstream trading advice is kept simple to create engaging, entertaining content NOT to educate or provide accurate information.
Trading is a profession, like engineering or medicine. How many part-time, self-taught professional engineers or doctors do you know?
If mainstream trading advice contained accurate information on what it really takes to be a professional trader, there would be no readers as most would lose interest if it was taught full-time academically, like engineering or medicine.
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Ok, just the basic SMA indicator. I’ve been using a MA ribbon, which doesn’t have the smoothing feature.
Thanks again!
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Thanks @Dollar_McGavin
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Why exactly? Because it is still sloped up? “Freshly” turned up? What about the blue SMA indicates a potential fake breakout?
Because it has broken above, retested, and in the process set higher highs/lows?
Because there is higher low after breaking above it?
Sorry for my newb questions and guesses
Where can l learn more about this? Google isn’t giving me anything useful.
Thank you for the specificity/nuance in these examples! 
@Dollar_McGavin ABSOLUTE LEGEND!!!
Any good resources that explain more about the way you think about/use SMAs? I’m sure you only scratched the surface here. (I see less than 20 posts when I search your profile for “SMAs” and “moving averages”… I need more!!! 
)
@FOK Please explain yourself. What is that monstrosity?
You have to click on the LINK which obviously gives you the answer right here on BP.
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@playingmarkets
If I may make a suggestion, please read and re-read my posts. I have a “dense” writing style, i.e. I include a lot of information in my posts that beginners often miss on the first read.
Yes, but also simply by looking at the yellow SMA, which contours the actual trend without the noise. The steeper the slope, the stronger the momentum. On the left side of the chart there was very strong upward momentum then strong downward momentum, then there was very little upward momentum (much lower peak in yellow SMA). After the latest peak in the yellow SMA the current downward slope is gentle, not steep, i.e. very little downward momentum.
After years of studying cycle analysis, my mind looks ahead of the market for turning points / trend reversals. And in this case, my mind is visualizing the yellow SMA continue to flatten out and then start to turn upward over the next few days.
No, the short simple answer to your question is after the 3rd Daily cycle downtrend channel (see new chart below) gets broken, the following daily cycle uptrend has candles / bars that break and close above the larger intermediate downtrend channel upper line.
The long answer is unfortunately much more complicated, too complicated to explain in a forum but I’ll give it a shot.
First, let’s understand the context. I am pointing out how @MattyMoney started his uptrend channel on the “wrong” price high. That “wrong” price high was part of a larger downtrend, which is why I wrote in my chart “This high is part of previous downtrend and not to be used for uptrend analysis.”
Matty’s analysis didn’t take into account 2 very important things:
- there are 3 different timescales in this chart: 4H (red SMA), daily (yellow SMA) and intermediate (weekly). Note that there is no SMA representing the intermediate timescale, but you can clearly see the intermediate downtrend by the series of lower peaks and lower troughs in the yellow SMA.
- GBPJPY is in the middle of a larger scale intermediate term trend reversal. This is what I meant when I wrote
In hindsight, I should have been more clear and should have written “on the verge of an intermediate term trend reversal”
The trend that is in the process of reversing is 2 timescales above the 4H chart timeframe.
This adds another layer of complexity. I’ll add this more detailed chart to illustrate.
Believe it or not, the chart above is a detailed look into the anatomy of a higher timescale trend reversal.
Please note the labels on the trend channels to illustrate their timescale.
Starting on the left side, there is the larger intermediate (weekly) downtrend. Note how it is made up of smaller daily cycle up and down trends, which in turn are made up of even smaller timescale up and down trends. This is the fractal nature of markets that most traders understand in theory but can’t wrap their heads around in practice.
Inside the intermediate downtrend channel, I only illustrated the daily cycle impulse waves (downtrends), each is labeled “Daily cycle downtrend channel”. Just keep in mind that there are daily cycle uptrends inside the intermediate downtrend, I excluded them to minimize the clutter.
The intermediate downtrend then gets broken to the upside when price makes a distinct close above the upper intermediate channel line. This was the start of the intermediate term trend reversal process.
Inexperienced Traders who’ve never studied cycles or trend reversals believe a trend reversal is an event, in reality a trend reversal is a process, a series of events. Everything inside the oval after price broke and closed above the the upper intermediate channel line is part of this reversal process.
Price then continues the intermediate term breakout into a first daily cycle uptrend outside the intermediate downtrend channel. Price then breaks the daily cycle uptrend and comes back down in a daily cycle downtrend to re-test the intermediate term breakout which seems to be holding as price has now broken above this last daily cycle downtrend channel’s upper line.
To me this has all the signs of an intermediate trend reversal with a 70% probability that price will hit the 200 level over 2 daily cycles (10 to 14 weeks). There are no guarantees of course, so please do not take this as trading advice . We also can’t say from this chart how far the new intermediate uptrend could run, for that we need to look at larger timeframes.
What would negate this trend reversal is if price breaks below the lower intermediate channel line, which would re-establish the intermediate downtrend.
One piece of advice I can give is to aim for a holistic view of an asset or market, instead of looking at it as separate timeframes. The way the smaller cycles integrate and interact with the larger cycles can tell you a whole lot more than what’s possible to see in one timeframe.
No need to apologize, we were all noobs at one time or another. Just keep in mind that my posts are long and contain a lot of details that most beginners miss on the first read. You’ll pick up more insights if you go back and study them in more detail.
Unfortunately, the way I use SMAs is actually my own style and an amalgamation of everything I studied over 17+ years.
First I recommend avoiding “internet information” most of it useless. The best resources are books written pre-2010 by professional traders and analysts.
Second, these are not trading strategies but specific schools and disciplines of technical analysis. I stopped trading to focus on learning and analyzing for 1½ years. Then trading became easy, no strategy needed as I could read what the market was doing.
Here’s a recommended reading list:
(Warning: this is not light reading, it is dense, complicated and extremely technical, literally rocket science for traders)
- Hurst Cycles - start with this J.M. Hurst book, “The profit magic of Stock Transaction Timing” then go search for and read everything you can find about Hurst Cycle Analysis.
- The Tillman Method - Find what you can about the Tillman Method by Jim Tillman who was a professional trader who took many of the principles from J.M. Hurst and further developed and improved upon them.
- Bressert Cycles - “The Power of Oscillator / Cycle Combinations” - A lot of what I use is heavily modified Bressert Cycles. Unfortunately there isn’t much written by Walter Bressert but this book is worth its weight in gold.
- “Technical Analysis of Stock Trends” by Robert Edwards and John Magee - Hands down, the best resource on technical analysis. Every professional trader has this in his / her library.
- “The Art and Science of Technical Analysis” by Adam Grimes, one of the better books on technical analysis.
These should keep you busy for a while, see you in 2 years! 
Whew! That was an exhausting write up…taking the rest of the day off now! 
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