Exponential versus Simple Moving Averages

[cpatte7372]

Hello,

Can someone please give me their opinions/suggestions on whether to use 50ema or 50sma? Also the advantages/disadvantages of each?

My understanding is that ema follows prices more closely than the sma, however it is more prone to whipsaws. However, since I talking about the 50 MA I'm not sure if that assumption actually applies.

I welcome your comments.

Thanks

Carlton

[mateusz]

I think the most important in choosing between ema an ma is actually what you are using with it - I mean indicators or any other techniques. Its simple to make backtestings and see the numbers, which moving average is better with your technique of trading. It will also apear which instruments are more rough or slight. I think its simple as that.

ps: For example many setups of CCI trading strategies have 34 EMA, I didnt see any examples of 34 MA in these techiques. Probably it works better with EMA.

[cpatte7372]

mateusz

Thanks for your comments.

Cheers

Carlton

[soylent]

Hi Carlton --

I agree w/ Matt -- totally depend on how you plan to use it.

For 'fundamental' trading, stick w/ the SIMPLE. Most people trading fundamentals look @ the 20/50/100/200 and are not trading 'technically' but they do look @ those averages to decide when to add to positions and when to delete.

Exponentials are nice when you trade purely technically -- they get you in a bar or two ahead of a simple MA. But, I've been finding that EVERYONE is doing this so now you can practically 'see' a change by the danged SPIKE as soon as the XMA tips up/down. Ugh.

Which leads me back to: Maybe just trade w/ a simple and get in on the simple turn because it will usually be a retracement from the XMA turn.

Got that?? <smile>

-c

[MR]

The thing about moving averages is sometimes they work and sometimes they don't. I find if you must use moving averages, and time permits, why not experiment with monitoring all the leading MA calculation options available?

[cpatte7372]

Soylent,

I think I understand.


Cheers mate.



Carlton

[soylent]

Originally posted by MR
The thing about moving averages is sometimes they work and sometimes they don't. ...

Marc --

That was pretty funny!

I always think that, too! <smile>

-c

[MR]

Hi 'c

For once I was actually trying to be serious!

Marc

Originally posted by soylent
Marc --

That was pretty funny!

I always think that, too! <smile>

-c