I like to trade with confluence and am trying to add moving averages to my tool belt. However, the problem with moving averages is that since you can put so many up (20EMA, 100SMA, 100EMA, 200SMA etc), you can find “confluence” anywhere, negating their usefulness.
ATM I only plan to use the 200EMA on the 1H charts, but are there any other popular moving averages used by the “big money”?
100 and 200 MAs on daily and hourly are most widely used… If you have a 100 hourly MA in the same vicinity as a 200 or 100 daily MA then that would be an area of confluence to watch.
The answer is none, atleast thats what i have found in my experience. Especially if your trying to figure out on an intraday time frame. Most of funds/prop firms are non indicator based trading strategies, so searching for the big money setting on MAs, Stochastics, CCI, bollinger bands etc. is not really a viable strategy.
[QUOTE=“MeiHua;506105”]
The answer is none, atleast thats what i have found in my experience. Especially if your trying to figure out on an intraday time frame. Most of funds/prop firms are non indicator based trading strategies, so searching for the big money setting on MAs, Stochastics, CCI, bollinger bands etc. is not really a viable strategy.[/QUOTE]
So you have seen no price interaction with 100 and 200 sma’s on hourly and daily charts…?
On 1 hr the 100 and 200 sma.
Check out e.g. USD/CAD or USD/CHF or cable or fibre for s/r 100 or EUR/JPY s/r 100 or AUD/USD s/r 100
or USD/JPY for crossover, or fibre for crossover, USD/CHF for crossover.
or the beauty - price ‘trapped’ at present - EUR/CHF
The only useless one hourly - EUR/GBP … have to go to the daily here … see that 200 rising to meet the 100 … roll on 86.00 
Funds & Investment Bank desks constantly reference moving average & Stochastic/MACD level interaction, amongst others, in the technical morning & afternoon bulletin calls to clients every day.
Which specific fund and/or proprietary operations have you worked at during the past 10+ years that don’t directly include or reference moving average & oscillator price indicators in their technical research notes?
Technical notes and referencing levels to clients is totally different then attempting to backwards engineer settings for a specific trading strategy which is what i was interpreting the OP to be trying to do. From what I have seen its daily levels not intraday levels. But then again I am more familiar with algorithmic trading and market making strategies.
The market analysts I have met are more oriented to teaching and marketing than to trading. Yet they spout off their opinions like someone with inside the market expertise. I think of them as people who get paid to write and make the right noises, not for achieving success in the market. Whatever they say about moving averages is what their bosses want them to say and no more.
You’re not even correctly or accurately describing the people being referred to in the previous commentary & even if you were, the above quote grab is the most telling part of your post.
What you [U]think[/U] & what you actually [U]know[/U] are two very different things altogether.
Kevin,
Take ILovePizzaMore’s suggestion & place those 2 specific moving averages on the charts he advised.
Keep a very keen eye on the hourly swing rejection levels, especially those that marry up with hard levels such as big figures because most of the bids, offers & various stops are placed & executed in layers ahead of & beyond those common technical areas.
In fact a fair amount of algorithmic programs from model accounts transact around very similar areas, particularly levels that include large stops being triggered in unison with news & data releases.
Treat the moving average levels as you intend to, merely as confirmatory back up & observe the activity around the swing & hard number levels whenever they match up.
The 100 & 200 simple moving averages on the charts ILovePizzaMore recommended will do fine for what you’re intending to use them for.
The thing you have to be aware of in this game is that everything works some of the time & nothing works all of the time, especially when you have a multitude of different models, strategies, methods & objectives churning through dozens of instruments, some of which directly impact, complement & influence the ones you’re trading.
If you can match up a couple of logical & commonly used technical tools to help focus you in on important levels such as those mentioned in double 6’s post, then you’ll be doing no better or worse than most of the other participants out there.
Contrary to what you’ll read on Babypips & other likeminded sites, there are professionals who use moving averages. They are widely observed within the professional environment & have been for years.
Traders don’t use them to trigger entries or exits, merely to help layer probability expectations & frame potential areas of interest.
They also know that these averages, & the levels they intersect, are being watched & observed by other professional outfits, much the same as fibonacci levels from the big swing levels are regualrly noted at pullback junctures within trending phases.
Professionals don’t use EMAs. They are lagging indicator.
Actually they sometimes use it as a tool to see market direction quickly, at first glance. But never use it for entry/exit purposes.
20 SMA for pullback, 200 SMA for trend. Higher is the timeframe more relevant they are. Daily and weekly charts, very relevant. More you drop in timeframe less relevant they are.
[QUOTE=“Kanbike;506352”]Professionals don’t use EMAs. They are lagging indicator.
Actually they sometimes use it as a tool to see market direction quickly, at first glance. But never use it for entry/exit purposes.[/QUOTE]
Incorrect… They are used as dynamic support and resistance levels.
I’m a firm believer that ma’s should only be used to find trends, not entry or exit points. And when it comes to trends, even then i rely on reading candles and structure more than ma’s for a more accurate read.