Which Simple Moving Average period is best for 1 hour forex chart ?

7 Comments

1. Trader Management - says:

   September 3, 2010 at 19:00

   Good afternoon Ali,
   I have to agree with most of the other answers; your question is a little vague. There is no ‘best’ moving average, and Technical Analysis is; as Common Sense suggests; an art. You need to spend time developing a system which works for you, incorporating technical indicators and levels into your analysis which you think could help you to identify pricing patterns and signals. Again, as suggested by b2fnow, were it as simple as identifying a ‘best’ moving average, a computer system would quickly have established it. Don’t fool yourself into thinking that any one moving average is better or worse than any other. Instead, look to understand the information gleaned from these indicators and see how it can be used in conjunction with others insights.

   If you are looking to learn more about technical indicators in general, my organisation offers a brief insight into several commonly used indicators. I should point out though that the page is more of an introduction to each, and wont explain which one is ‘best’! If you are interested, the page; which is part of TMC’s Forex education series; is accessible at http://www.tradermanagement.com/trading-resources/forex-education-2/.

   I hope that the above is of some use to you, Ali.

   Yours sincerely,

   Christopher Kelly
2. Zinfandz - says:

   September 3, 2010 at 19:00

   Your question isn’t too specific, any moving average can be the "best" depending on what your trading strategy is. In regards to EMA vs SMA, the EMA shows more current price changes as more important in the formula and older prices as less influential.
3. Common Sense - says:

   September 3, 2010 at 19:00

   You are barking up the wrong tree. Technical Analysis is an art. There is no "best way", "best MA" etc.

   The key for success in FX (or any other trading) is;
   A. Develop a system that works for you.
   B. Be very happy if 50% of your trades are profitable. Understand that 75% of your success is great trading money management skills.
4. b2fnow - says:

   September 3, 2010 at 19:00

   You are asking this question because the possibilities and combinations are limitless, but there really isn’t a "best" moving average, it’s just a matter of opinion and preference that best suits the time frame. But if it were as easy as finding a "best" MA, a computer back-testing program would find and verify it, and anyone could do it. Any computer can show that MA’s are a hopeless trade indicator. It’s an art that you develop rules for.

   It depends on whether you’re using these as surrogates for the trend, or as support and resistance, or as setups and triggers for entry and exit.

   Most traders use several MA’s. Try the 50 EMA or 60 EMA for a longer-term line on the hourly and four-hour for the support of trend. Or maybe you’re using two MA’s in a crossover signal system. The 15 MA and 21 EMA are the same thing, but take a look at those. But just as many traders use a 20 MA or 21 MA instead of the 15. You’ll find that if you draw a short-term trend line, the line overlays the MA’s. This is what you’re looking for; some form of confirmation.

   There are several informational and learning websites. If you watch their trading videos, you’ll see what they’re using.

   http://www.forextv.com/forex-video-archive?channel=41
   http://www.babypips.com/
   http://www.dailyfx.com
   http://www.fxstreet.com/rates-charts/usd…
   http://www.forexpeacearmy.com/

   The best way to learn is from a book. You can find three different eBooks here:

   http://members.cox.net/axiom11/#Info
   Insider Forex Secrets

   http://members.cox.net/axiom11/page2_lin…
   Forex Trading-Revolution To Home Based Internet Business
   Forex Trading Strategies

   There are many eBooks listed here, so to find the one you want, just hit Ctrl-F (for Find) in your web browser to find "forex".
5. trader - says:

   September 3, 2010 at 19:00

   EMA 10 and EMA 20 work well for me on the 1 and 4 hours charts.
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