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To: AreWeThereYet who wrote (3052)1/14/1998 7:54:00 PM
From: Raymond James Norris  Respond to of 14266
 
I know that www.bigcharts.com has the option of plotting simple MAs as well as EMA. When plotting the EMA, the most commonly used one is the 13 day. They should not be substituted as simple MAs (in other words, don't plot 100 and 50 EMAs expecting to see anything revealing). The EMA is made to give less "whipsaws" and its strongest buy and sell signals is when you see the price close above or below the EMA. The process of calculating always puts more weight on the most recent close.

MAs do not forecast the future. They help us to trade in the direction of the trend. Simple MAs are probably more commonly used but the degree of error is less in EMAs.

Conservatively Yours,
Raymond J. Norris