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BaseerAhmed...
I've never doubted your EQ all along!... :)
iPunter : we know u mean well
hahaha...
forget it... just kidding... hehe... :)
Hey iPunter,
What radical insights are you talking about?
Yes, yes...
I agree totally with those posts, too...
My posts are nothing against the rudiments of TA as such...
They are simply my insights which I had hoped would benefit many who will appreciate them.
Anyway, if such 'insights, radical though they may appear at first sight, are not in demand, then so be it! ... :)
Advantages of MA
- Easy to learn
- Easy to apply
Disadvantages of MA
- Lagging indicator
- Does not take trading volume into consideration
i am new to TA....agree that it lags but still better than totally no clue. use to chase after price, now better. no offence to anyone :)
Interesting debate going on here.
Perhaps , for the benefit of newbies and refreshing for all, if the energy could be channelled by putting up nuggets of postings on the usefulness , merits, demerits etc of the various MA.
I have found the Accumulation/Distribution chart to be a leading indicator at times.
iPunter, no doubt the MA are lagging indicators. But it really depends on the rate of change of price and the settings for your MA. If the price is really volatile like that chartered counter, the MA is practically useless.
One thing one, especially if a newbie, must learn is not to get angry when one sees or hears something which is not in accordance with one's presently-held beliefs.
Let's get back on track... ie to the original point...
Specifically about moving averages...
Why does a moving average change direction slowly?
Answer:
Because it needs prices to move sufficiently in the opposite direction before it shows the change !
So like I said before, moving averages show yesterday's news today, and many act on it tomorrow!
I second that. There's a saying... "In a kingdom of blind men, the half-blind man is king"
TA is not 100% fully accurate crystal ball.....but its still better than going in blindly.
Congratulations!...
You have provided the answer yourself by saying that...
And precisely, too!... :)
What do you mean? The moving average is usually slow to change direction.
I am sure if I say when a moving average is 'uptrending' or 'downtrending', usually the opposite will happen, no one will believe me.
Does anyone even see a grain of truth in that?
Thanks
When the short-term line crosses above the long-term line, its a bullish signal.
But one word of caution on moving averages. By the nature of their construction, MAs are lagging indicators.
Anyone knows what is the implication when the moving average for the shorter period crosses the moving average for the longer period with both averages moving upwards?