Moving Average

This is a discussion on Moving Average within the Technical Analysis forums, part of the Methods category; Can the Moving Average really give an accurate indication of the trend on a particular timescale ?...

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Old Oct 11, 2004, 3:19pm   #1
 
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Moving Average

Can the Moving Average really give an accurate indication of the trend on a particular timescale ?
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Old Oct 11, 2004, 3:40pm   #2
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depends how you interpret it
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Old Oct 11, 2004, 3:45pm   #3
 
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Quote:
Originally Posted by victor
Can the Moving Average really give an accurate indication of the trend on a particular timescale ?
Hi Victor.
I am not sure if this answers your question, but here is my idea about M/As. Yes, they do indicate the direction of a trend in whatever timescale you are observing, but so do many other tools. Best of which is "PRICE". A M/A dilutes the information contained in PRICE and maybe makes it easier for the human eye / mind to intrepret.
Of course no moving average of any type will give an indication on whether a trend will continue.
Maybe used with other tools it could be a useful component of an approach or method, but this is going to be more of a function of the trader utilising the approach as opposed to any benefits that M/As may offer.
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Old Oct 11, 2004, 4:11pm   #4
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Quote:
Originally Posted by victor
Can the Moving Average really give an accurate indication of the trend on a particular timescale ?
It can indeed, provided of course that the time period concerned is in the past and not the future. Moving averages in combination with other moving averages and/or in combination with other technical parameters and other interpretation based on understanding the price-movement tendencies of the particular security concerned can give varying degrees of probability of trend continuation in the future too, but certainly not an "accurate indication". IMHO.
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Old Oct 11, 2004, 10:14pm   #5
 
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The treastie of MA has to be kaufman "Trading Systems and Methods." & "Smarter Trading" - like most things they just give an indicator (i.e. read the chart in front of you )
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Old Oct 11, 2004, 11:48pm   #6
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Originally Posted by Roberto
It can indeed, provided of course that the time period concerned is in the past and not the future. .

Roberto, you HAVE to tell me who you get your datafeed from.....
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Old Oct 12, 2004, 12:18am   #7
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Originally Posted by TheBramble

Roberto, you HAVE to tell me who you get your datafeed from.....
What do you mean, Brambly one?
I seem to be the one without brains tonight ...
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Old Oct 12, 2004, 12:21am   #8
 
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I think he's referring (and DO stop me if I'm mistaken Tony, but I think I'm on safe ground here <g>) that a non-past time based MA must be based in the future, and for you to consider that it might exist in such a matter of fact manner suggests we could all benefit hugely from subscribing to whichever data supplier you are getting this future price feed from.....
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Old Oct 12, 2004, 12:28am   #9
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Spot On Dave.

A futurological MA would certainly shift my averages....
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Old Oct 12, 2004, 12:42am   #10
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Sorry, I'm being very thick, Tony. But either I've misunderstood you or you've misunderstood me. I think you are making the same point that I was trying to make in my reply to Victor.
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Old Oct 12, 2004, 12:51am   #11
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Originally Posted by Roberto
Sorry, I'm being very thick, Tony. But either I've misunderstood you or you've misunderstood me. I think you are making the same point that I was trying to make in my reply to Victor.
Well it's come full circle then, as I knew it would.
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Old Oct 12, 2004, 12:56am   #12
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I'm beginning to think that - in the words of a certain Professor of Classics who, secretly, was sadly unable to translate substantial proportions of the original Greek - "the passage loses more than it gains from an excessively detailed analysis".
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Old Oct 12, 2004, 1:12am   #13
 
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I had a bottle of that once, but I couldn't finish it.
(Sorry, I like to obscure moments like this with an inappropriate observation that adds little but extra confusion - it's a hobby of mine.)
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Old Oct 12, 2004, 1:22am   #14
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Old Oct 12, 2004, 10:18am   #15
 
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Quote:
Originally Posted by victor
Can the Moving Average really give an accurate indication of the trend on a particular timescale ?
It can give you a pretty good idea, but is unfortunately still a lagging indicator, so whipsaws are a painful reality here. It works nice however as a tool in you Technical Analysis but not a great on shorter term trading signals.

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