Moving Average

Jul 19, 2004
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noitacol
#3
victor said:
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.
 

Roberto

Well-known member
Aug 28, 2004
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#4
victor said:
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.
 

JJL3142

Active member
Jul 8, 2002
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#5
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 )
 

DaveJB

Well-known member
Dec 15, 2002
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#8
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.....
 

Roberto

Well-known member
Aug 28, 2004
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#10
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. :)
 

Roberto

Well-known member
Aug 28, 2004
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#12
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". :)
 

DaveJB

Well-known member
Dec 15, 2002
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#13
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.)
Dave
 
Oct 8, 2004
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Forextradersa
#15
victor said:
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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