This is topic What is the most important/useful/versatile MA? in forum General Investing Topics at Allstocks.com's Bulletin Board.


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Posted by permanentjaun on :
 
Hey all,

This has been mulling over in my head and now I put the question to you. What is the most versatile MA on a chart?

I'll explain by showing the extremes.

A 10 MA is useful in that it reacts quickly to price movements. It can show you possible reversals in trends. Unfortunately, the 10 MA is not a very significant support/resistance line. It should be used more as a price trend indicator and not a line to expect price to bounce off of.

A 200 MA is useful in that it is a huge support/resistance line. Many times you will see prices bounce off of this line. OR, if a price crosses the 200 MA then it creates a huge signal and the price will continue in that direction at increased rates. This is due to it indicating a change in long term trend. Unfortunately, the 200 MA does not react to price movement very well.

So what MA is versatile enough to react to price movement relatively quickly as well as proving to be a significant support/resistance line? 20? 30? 50? 100? Simple? Weighted?

I'm asking in terms of periods. For example, don't tell me a 20 Day MA is most useful. The "day" of your description is not useful to someone that is in and out of trades in 5 minutes. Just answer saying 20 MA, or 50 MA. This way it is relatable to all charts.

Thanks. Matt
 


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