Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Enigmatics

The More Trustworthy Average: EMA, MA, or VWAP?

Recommended Posts

Just out of curiosity .... I wanted to get your guys' thoughts on these three as to which would be a more viable indicator of trend.

 

what is trend to you?

how do you define your meaning of trend?

Share this post


Link to post
Share on other sites
Just out of curiosity .... I wanted to get your guys' thoughts on these three as to which would be a more viable indicator of trend.

 

Do you mean VWAP, volume weighted average price, or VWMA, volume weighted moving average?

Share this post


Link to post
Share on other sites
Do you mean VWAP, volume weighted average price, or VWMA, volume weighted moving average?

 

Definitely VWAP.

 

The reason I ask is there was a tutorial on here that depicted a VWAP/PVP trade. I it was also recommended to me to start following the VWAP by somebody else. I've found it to be very useful, but I catch a lot of resistance from others who swear by using short term EMA's or MA's when determining trend.

Share this post


Link to post
Share on other sites

I have found the VWAP to be very useful as an automated system trigger tool.

 

If you have Tradestation or similar tools, I found it useful to be able to vary the reset time of the VWAP and not use the default of either midnight or the close of previous session.

 

I have found all other moving averages to be "teaser" indicators which look good to the eye but are useless in real trading.

 

Just my opinion,

 

Momentum Chaser Steve in San Diego

Share this post


Link to post
Share on other sites

MA (and its variants) is the most useful indicator ever invented.

 

but if MA cross is your signal, it is too late. you deserve to die.

this is like watching the speedometer while driving towards a wall...

if the speedometer reads more than zero when you reach the wall, you will have a crash.

you do not need the speedometer to reach zero to confirm the crash.

the speedometer is only an indicator,

how you use it depends on the context.

if you are a one trick pony,

then you might as well be a donkey.

Share this post


Link to post
Share on other sites

Let me put a short quote from the article here: "...MA is the #1 loser in the market....all indicators are loser, but MA is the leader"

There is more then enough info here, but I am open to any argument or evidence to prove it wrong.

Share this post


Link to post
Share on other sites

Some say that MAs are useful and others that they are useless. Some say that VWAP or VWMA are better or worse than EMA or SMA. Are we dealing with subjective opinions or are any or these claims backed up statistically or quanitatively?

Share this post


Link to post
Share on other sites
Some say that MAs are useful and others that they are useless. Some say that VWAP or VWMA are better or worse than EMA or SMA. Are we dealing with subjective opinions or are any or these claims backed up statistically or quanitatively?

 

 

some say use price action only,

some say use indicators,

some make money,

some lose money,

some are happy,

some are not.

you just have to find what works for you.

other people's PnL does little for you or me.

Edited by Tams

Share this post


Link to post
Share on other sites
some say use price action only,

some say use indicators,

some make money,

some lose money,

some are happy,

some are not.

you just have to find what works for you.

other people's PnL does little for you or me.

 

In the last analysis finding what works is the bottom line. However, this search can be facilitated by studies which quantify the relationships even if only for a limited number of circumstances. Absent such studies it is hard for me to see the value of a colllection of numerous opinions. Hence, my original question about the availability of statistical and quantitative results.

Share this post


Link to post
Share on other sites
In the last analysis finding what works is the bottom line. However, this search can be facilitated by studies which quantify the relationships even if only for a limited number of circumstances. Absent such studies it is hard for me to see the value of a colllection of numerous opinions. Hence, my original question about the availability of statistical and quantitative results.

 

http://ssrn.com/

 

PS: Statisticians tend to be just as biased as technical analysts, when it comes to proving a stationary property of the markets.

Share this post


Link to post
Share on other sites
Social Science Research Network (SSRN) Home Page

 

PS: Statisticians tend to be just as biased as technical analysts, when it comes to proving a stationary property of the markets.

 

PPS: Statisticians might be biased but their statistical calculations should be objective and reproducible by third parties or else ignore their results. In any case, all that is need is not sophisticated statistical analysis but just some simple raw statistics (e.g., X% cross for EMA, Y% for..., etc.) that can be generated by backtesting with any of several programs. Some information along these lines has been published but not enough that I'm aware of to pick a winner. Without that we are left with a bunch of subjective "claims" that perhaps some find meaningful.

Share this post


Link to post
Share on other sites
In the last analysis finding what works is the bottom line. However, this search can be facilitated by studies which quantify the relationships even if only for a limited number of circumstances. Absent such studies it is hard for me to see the value of a colllection of numerous opinions. Hence, my original question about the availability of statistical and quantitative results.

good luck.......... I wish you the best.

 

 

to be profitable in trading,

one needs not to be a genius,

to be successful in trading,

no advanced degree is required.

all that esoteric indicators

and all that secret formulas are fluff.

to be successful and profitable in trading,

all you need is one simple mindset -- don't argue with the market

the rest of the detail will look after themselves.

Share this post


Link to post
Share on other sites
good luck.......... I wish you the best.

 

 

to be profitable in trading,

one needs not to be a genius,

to be successful in trading,

no advanced degree is required.

all that esoteric indicators

and all that secret formulas are fluff.

to be successful and profitable in trading,

all you need is one simple mindset -- don't argue with the market

the rest of the detail will look after themselves.

 

And how does this relate to the topic?

Share this post


Link to post
Share on other sites
And how does this relate to the topic?

 

if you follow the MA, you cannot be arguing with the market.

 

 

 

 

not everybody sees that.

some people needs to be told,

some people needs to be wagged by a 2x4

before they can see the light.

Share this post


Link to post
Share on other sites

you are correct Ole. Many of those studies find that MA by themselves are not that reliable. But dont forget there are a lot of 'subjective' parameters that go into what to study in those studies.

For someone to cover all the parameters, all the statistics, all of the time for all the instruments in a study - thats probably statistically impossible. :)

Plus often these things are studied not from a trading point of view but from an investors benchmark view.

Nothing works all the time, but it does not means it can not work.

Share this post


Link to post
Share on other sites

what i know is. EMA is not the actual average. the one and only actual average is SMA.

i like the idea behind VWAP and VWMA that weighting volume. but both are not that different with SMA.

so it's depend on your purpose. if you need actual average of past prices. use SMA.

or if you need just smoothing filter regardless of actual average. use any other moving averages rather than SMA.

Share this post


Link to post
Share on other sites

I can't wait to read the flames and crazy rants for what I am about to say.

 

I can teach anyone to trade using the VWAP with EMA and guarantee with my cash that they will pull 4 points ( 16 ticks) per day from the ES.

 

The trick is that they would have to do exactly what I teach them to do and nothing else. And that is a big trick indeed. The heart of forums are folks that already trade but are looking to add learn or do something else. The trick is only trade with the trend as I define.

 

The problem is so many people cant help but take counter trend trades.

 

 

Also to trade with the trend you must also be able to identify when the trend may be changing. That is why it is hard to trade with the trend. Most people have not worked on how to tell when a trend may be changing or ending.

 

Vwap will give you trend . EMA will give heads up as to when trend might be changing. Trend is not as simple as a series of higher highs ect even though that sounds logical.

 

Also to trade VWAP you do not use it as a single number but rather you must use its fractal coefficients.

 

You also must learn to read the market and understand context. Stop looking for the magic indicator of buy when this color changes etc etc.

 

So now flame on !

Share this post


Link to post
Share on other sites
I can't wait to read the flames and crazy rants for what I am about to say.

 

I can teach anyone to trade using the VWAP with EMA and guarantee with my cash that they will pull 4 points ( 16 ticks) per day from the ES.

 

The trick is that they would have to do exactly what I teach them to do and nothing else. And that is a big trick indeed. The heart of forums are folks that already trade but are looking to add learn or do something else. The trick is only trade with the trend as I define.

 

The problem is so many people cant help but take counter trend trades.

 

 

Also to trade with the trend you must also be able to identify when the trend may be changing. That is why it is hard to trade with the trend. Most people have not worked on how to tell when a trend may be changing or ending.

 

Vwap will give you trend . EMA will give heads up as to when trend might be changing. Trend is not as simple as a series of higher highs ect even though that sounds logical.

 

Also to trade VWAP you do not use it as a single number but rather you must use its fractal coefficients.

 

You also must learn to read the market and understand context. Stop looking for the magic indicator of buy when this color changes etc etc.

 

So now flame on !

 

 

no flames,

 

but hats off to you.

 

seriously. sincerely.

 

when someone is willing to talk, I am ready to listen with humility.

 

would you like to start a new thread on your method?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 29th March 2024. GBPUSD Analysis: The Pound Trades Higher But For How Long? The global Stocks Markets are closed due to Easter Friday (Good Friday). The NASDAQ continued to follow the sideways trend while other indices again rose. The SNP500 reaches an all-time high, but the NASDAQ remains under pressure from Tesla, Meta and Apple. The Euro continues to trade lower against all major currencies including the US Dollar, Euro and Japanese Yen. The British Pound is the best performing currency during this morning’s Asian session. However, investors are largely fixing their attention on this afternoon’s Core PCE Price Index. GBPUSD – The Pound Trades Higher but For How Long? The GBPUSD is slightly higher than the day’s open and is primary due to the Pound’s strong performance. At the moment, the British Pound is increasing in value against all major currencies. However, the US Dollar Index is also trading 0.10% higher and for this reason there is a slight conflict here. If investors wish to avoid this conflict, the EURUSD is a better option. This is because, the Euro depreciating against the whole currency market avoiding the “tug-of-war” scenario. The GBPUSD is trading slightly lower than the 2-month’s average price and is trading at 49.10 on the RSI. For this reason, the price of the exchange is at a “neutral” level and is signalling neither a buy nor a sell. The day’s price action and future signals are possibly likely to be triggered by this afternoon’s Core PCE Price Index. Analysts expect the Core PCE Price Index to read 0.3% which is slightly lower than the previous month but will result in the annual figure remaining at 2.85%. The PCE rate is different to the inflation rate and the Fed aims for a rate between 1.5% to 2.00%. Therefore, even if the annual rate remains at 2.85%, as analysts expect, it would be too high for the Fed. If the rate increases, even if only slightly, the US Dollar can again renew bullish momentum and the stock market can come under pressure. This includes the SNP500. Investors are focused on the publication of data on the UK’s gross domestic product (GDP) for the last quarter of 2023: the quarterly figures decreased by 0.3%, and 0.2% over the past 12-months. This confirms the state of a shallow recession and the need for stimulation. The data, combined with a cooling labor market and a steady decline in inflation, increase the likelihood that the Bank of England will soon begin interest rate cuts. In the latest meeting the Bank of England representatives did not see any members vote for a hike. USA500 – The SNP500 Rises to New Highs, But Cannot Hold Onto Gains! The price of the SNP500 rises to an all-time high, before correcting 0.33% and ending the day slightly lower than the open price. Nonetheless, the index performs better than the NASDAQ which came under pressure from Tesla, Meta and Apple which hold a higher weight compared to the SNP500. For the SNP500, these 3 stocks hold a weight of 9.25%, whereas the 3 stocks make up 14.63% of the NASDAQ. The SNP500 is also supported by ExxonMobil’s gains due to higher energy prices. The market will remain closed on Friday due to Easter. However, the market will reopen on Monday for the US and investors can expect high volatility. Investors will also need to take into consideration how the PCE Price Index and the changed value of the US Dollar is likely to affect the stock market next week. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Michalis Efthymiou Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • MT4 is good and will be good until their parent company keep updating the software, later mt4 users will have to switch to mt5.
    • $SOUN SoundHound AI stock at 5.91 support area , see https://stockconsultant.com/?SOUN
    • $ELEV Elevation Oncology stock bull flag breakout watch , see https://stockconsultant.com/?ELEV
    • $AVDX AvidXchange stock narrow range breakout watch above 13.32 , see https://stockconsultant.com/?AVDX
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.