I became see the period moving there are “some” period recommended like 10-20, 50-100. and 200-50. And for me is very confusing or somewhere. What is the perfect period o What is the most recommend In the hour I take a decision?
The best MA period to use is the one that best suits your strategy and trading style. A 20 period MA will give many more changes of direction or crosses or extreme highs and lows etc. than a 200 period MA. But that does not mean more profit, it just means more data which in each individual case is weaker and of shorter-term value because the 20 is far more volatile than the 200.
If you are using 2 MA’s, it almost always is better to make sure the period of the longer one is at least 3 times the shorter.
This.
My personal go-to, 20 EMA. It has been the most versatile, and reliable, for short/med term trades.
in the case if you like use 2 MA for crossover, What other period your recommend?
2MA? That’s too fast. That’s the same thing as price action. That’s the average of every two candles.
Did you mean to say “20”?
20 period.
I would not recommend using MA cross-overs as entry signals in any strategy - the actual current price and the point in time at which the MA’s cross have no relation. MA’s are fine for defining and evaluating trends but anything further is a misuse.
I don’t understand. If you define a trend, wouldn’t that be an entry signal?
Yes, there are false entry signals when trading the MA. Is that what you’re referring to?
If a pair is in a range, the MA is useless. I agree there.
But if price is crossing/bouncing a MA, and also breaking out of a range, wouldn’t that be a good entry signal?
The relationship between historic price and MA’s confirms a trend and the MA’s can be used to evaluate one trend against another. But they just basically add a high degree of confirmation of the trending condition of the market.
The crossover between two MA’s is as random an entry signal as tossing a coin. In fact tossing a coin in an uptrend would be as good as using MA golden crosses - each day you toss a coin and buy if its heads and wait if its tails. You would almost certainly make money over the long run, but would that validate your entry signal?
no, it would be a misguided approach
MAs have their uses (i use them, myself), but “trade entries” isn’t one of them
they can be helpful for defining trend (as mentioned above by Tommor, with the long MA at least 3 times the lookback of the short one, if you use two)
As with many things in this world, it adds interest when there is a counter-view, and, at the risk of getting blown off the site, I am going to swim against the general current here!
I use MA’s for trend start, direction, and end signals! I am confident using MA crossovers as a strong entry signal and don’t even look for confluence from other indicators. The reason for this is that I consider that by far the biggest problem is the exit, not the entry.
If one considers the theory here, the MA is telling us what has been the average value of price over the period of X time. This value is then plotted on the current time candle. So if the average value of price over the last X time is greater than the average price over the last Y time then the X value will be higher than the Y value on the current time line. This shows a general increasing value in price which suggests an upward trend starting/continuing and the X MA (by simple mathematics) will have crossed above the Y MA on the current time line. That fact puts the probability of further gains greater than 50%.
The biggest problem with MAs is that trends/moves tend to exit far quicker than they start, and the same MAs used for the entry will not have time to react quick enough to register the faster price exit (because they are still using the same math equation). Which is entirely logical, traders are slower to enter a new position when price starts to move than to exit a position when price reverses whether the position is in profit or loss. For example, a trader may gradually scale into a trend as price progresses but may quickly dump the whole lot in one go if something unexpected and negative appears.
I also tend to go against the flow regarding the ratio of two MAs. I use 3 to 5 MAs of which three are very close together. I have attached a pic of USDJPY on a 4-hour TF which, I think, shows a triple MA (plus 1) trend identification both in terns of crossover start and parallel continuation.
Regarding exits, one can either use different MAs or the same MAs on a lower TF. I prefer the latter. If the same triple MA set-up crosses on a 1-hour TF before price reaches my Price Action target then I exit anyway.
I only post this to suggest that there are indeed many ways to skin a cat (not that I would ever want to do that!) and a trader should try out the various alternatives and see what works personally and what doesn’t. Afterall, we only need to know three things: which direction, how far, where to quit. Can’t really be that difficult! Can it?