You recieved good answers on the MA question. They can differ for many reasons. There is nothing sacred about a 20, 50, etc MA. MSWIN gives you a choice of about 8 MAs with the capability to build more. They would all give different answers. an EMA because it still contains the first data points in its calulation depends on Data available for the computation. A number of things to muddy the waters.
What do you do? First, you get as much data as available to you. Then you backtest tons of stocks to determine the effects of indicators, period lengths, etc. Prove to yourself, if selling on a 50MA downtrend, if the stock must trade its float if it goes below 20MA, etc. Try some of the old classic indicators, then try the new ones.
What are you looking for? You want a system that fits you (need to know yourself) that you trust to buy and sell on its signals. It becomes relative what the software says to a degree,Then you close out the opinion of others. If you did your homework, you have a good system that works on many stocks at all points in its life cycle and fits your goals.
You have chosen a real time program, now you have other choices to make. Will you trade off the RT charts or EOD? What periods will you use on a RT chart? Do the same EOD systems work on a 10 min chart? Only you will know after you do your additional homework.
BTW the guru could have said that a 8EMA with a 7 horz lead is holding it back just as well. |
