Should moving averages be given much importance?

Beginner Questions
41

I’ve been wanting to try that strategy. Is it consistently profitable?

42

This is the same issue I encounter that’s why I asked if it should be given importance.

43

So it acts like supporting data to a trade idea that you want to take?

44

Do you use them for your trading strategy? I try to use it but what I see is that it further clouds my judgment then the data is lagging anyway.

45

@blueskies18 Yes, moving averages are very much part of my strategy.
I day trade indices Dax and Nasdaq mainly (Dax morning UK time Nasdaq afternoon UK time), looking for trends which you could call ‘micro trends’ on 5mins and 1 min charts.
I also find Keltner channel useful ie when 8EMA is out of channel (signifies momentum).
Take a look at Dax this morning - 8EMA 20 SMA 5mins chart :wink:

46

i use it a lot
it is the best indicator to work with
you can really earn money by use of that, it is the mother of indicators i think
also because they have lag they are very useable to me

47

Well i did some researches about it and I just finished. I guess the best thing is to count on indicators as confirmations for your trades but not as triggers.

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48

Also, as ive heard, ichimoku cloud is very accurate with the signals but its hard to understand and trade with. havent leant it yet. I will tell you more when i learn more :smiley:

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49

compared with most indicators, that might be fair comment, yes …

not necessarily, but sometimes it can look that way because there’s so much false and stupid “information” about it online - especially in forums and on youtube

these might help (good threads worth reading) -

http://forums.babypips.com/newbie-island/80639-bollinger-bands-vs-ichimoku-cloud.html

http://forums.babypips.com/free-forex-trading-systems/81862-good-trading-conditions.html

http://forums.babypips.com/newbie-island/75436-ichimoku-ea.html

http://forums.babypips.com/free-forex-trading-systems/74097-very-efficient-simplified-ichimoku-system-3.html

50

Thanks mateeeeeee I really appreciate your help.

51

I don’t mean this as an offense to those that use moving averages, but they are training wheels that may be suitable for use as a confluence at best.

You can get much better information by reading market structure and price action. The sooner you lose the training wheels the more robust your trading will be for a wider variety of scenarios.

52

I totally disagree, MA is a basic indcator, i would agree with you if it was MACD for example, or any other indicator, but MA and Volume are basic indicators and can come in handy for some trading styles.

53

Training wheels are a basic way to ride a bike before learning how to actually ride a bike.

Crawling is basic way for mobility before learning how to walk.

Moving averages are a basic indicator used before learning how to read market structure and price action.

54

MAs are used even by professional traders, the usage varies a lot but i have seen them using it.

55

I know there are some professional traders that use them, just as some professionals use ichi moku, bollinger bands, vwap, macd, etc. That means that it is what works for them at the moment, where ever they are in their trading journey.

I used moving averages in the past and on rare occasions will use a 50 MA for a specific purpose, but it doesn’t replace market structure and price action for my determination of what price is doing or likely to do. That’s where I am in my trading journey. MAs give an outdated cliffnotes version of what market structure and price action are giving in full context in real time. If I’m risking my money, I want the real time full context. It’s of little use for a moving average to tell me price has changed to bearish an hour after the market structure told me.

Using MAs doesn’t make anyone a bad person. We all have to start somewhere. In the end, what works for the individual trader is all that matters.

56

It all depends on your trading style dude, you cant say its a training wheel, it might have been for you, but it doesnt mean that it necessarily is the same for anyone, i have also seen that people expect MA to react as a support/resistance and i have seen people getting benefit with that. what i mean is that some people may even use an indicator in a way that even seems stupid (for example someone may wait for the price to be placed inside the Ichimiku cloud and then trade) but as long as they are getting benefit from their strategy, it cant be said that they are using it wrong or that its a noob thing to use an indicator or anything, especially when it comes to MA and Volume.

57

That’s why I said, “In the end, what works for the individual trader is all that matters.”.

58

So we are agreeing ? :smiley: btw, thanks for sharing your time and ideas mate.

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59

Thanks for sharing your thoughts as well. Diversity of opinions is good to prevent group-think.
Group-think is what leads the sheep to walk right off the cliff.

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60

wowwww “Group-think is what leads the sheep to walk right off the cliff.” That was wiseeeeee man, that was wiseeeeeeeee