By that i mean, they’re a mathematical combination, but like 10 years from now will those MA’s be the same? If you used them as a crossover, would that crossover continue to work? Things like that or how would they change?
Thanks
As you say, MA’s are only a mathematical formula so their change is simply a reflection of the movement in the underlying price. So the question is really will [I]price action[/I] be the same in 10 years time. If it is then the MA’s will work the same. No one can say what kind of forex markets will exist in the future - for example, look what happened to the European currencies that eventually became the Euro 
Ultimately, price action in currency pairs is the result of the relative changes in economic and financial conditions in the respective countries. If we entered a period of prolonged similar global economic stability then price volatility would reduce considerably. But I think that in the current global conditions, that state of stability is highly unlikely for many years ahead, if ever! Another issue would be national intervention to stabilise rates.
MA’s are so-called lagging indicators and their function is to identify a current underlying price direction. But they do not predict how long or how far the move will continue. They therefore require a certain amount of previous data that is relatively continuous and sufficiently active in order to be of any use at all in (a) identifying an existing move and then (b) continuing sufficiently in order to present a trading opportunity.
Dormant, whippy, and erratic price action are disastrous for MA-based models.
Ok thank you that does make sense. I use 55 200 and 1 and 4, the 1 and 4 I can’t see changing drastically because of how small of a timeframe they cover?
I am not sure I fully understand. Do you mean you use 1, 4, 55, and 200 MAs? On which TF? Which crossovers trigger entry and exit?
Daily timeframe 1 and 4 is crossover entry
Excellent answer (if I may say so)!!
I agree that was a very good answer lol
Thanks for the comments - I’m happy if I have been of some use!
I guess strictly speaking a 1MA is not an MA at all It is a line through the daily closes, and certainly does give its own perspective on direction and volatility when overlaid on a bar chart instead of just a line chart. I am really intrigued by your use of such short-term crossovers of 1 and 4 against a background of relatively much longer MA’s as 55 and 200. Are you looking at a fixed target following a crossover, perhaps on the next day? A longer term trade based on 1/4 crossovers against a 55/200 identifier seems to have strong possibilities of sizeable losses as well as occasional long trend gains.
Getting back to your question have you compared your results on, say, EUR/USD against, say, EUR/GBP? These two pairs may give you some idea how price movements can differ and what effect they may have on MA signals.
You have been very helpful! I use it based on a system that was created here, me and another member actually have a trading journal about it here on baby pips. I use it as this, the 1 and 4 LWMA cross and that give a entry signal, while the 200 EMA is used to identify trend, as well as a exit if needed/support/resistance. The 55 is kind of like a moving support and resistance zone, i don’t use it that much. TP is usually around a support or resistance area, while stops depend on the pair for me.
So a 1 MA isn’t going to change much over time?
I am not sure you can assume that. The 1 MA is only affected by where the market closes each day. If a market slipped into severe doldrums or uncertainty then it could be very erratic intraday but end up pretty much back at the opening level on the close. Perhaps I would be more concerned about how the 1MA might move vis a vis the 4MA. In a tight ranging market the close could be up and down every day but giving a fairly flat average over the week (or 4 days MA).
Are you planning on automating your method? I just wondered if that is why you are concerned about the consistency of a 1MA in the long term
As a thought, I just wondered have you considered a 1 MA based on a median for the day and not just the close? If I understand it right an LWMA gives extra weighting to the lastest bar but this is irrelevant with a 1MA? I just wondered whether a median or OHLC average might better represent the day and avoid some extremes?
Just a thought
Ok thank you! I don’t plan to auto it, I’m curious, to see if i will need a new lwma in the future lol. I will consider putting it to the close as you recommended, that sounds interesting. Thanks!