Battle of Moving Averages indicator versus Trend Lines
The famous death cross for moving averages is when 50 EMA cross down the 200 EMA and that is when the price action starts to fall or where you begin to short.
In this chart, you can see on 20 Dec 18, there was a death cross pattern. And if you use the EMA indicators, you are likely to sell and make over 12% profits.
But in the case of using the trend lines, you would still hold on to your positions as it has not broken down at all. Again, it is on hindsight as we are passed that stage now and looking at present price action. And because you hold, you probably would have seen your profits soar to the price level of 29508 (whether you take profits before the plunge down is another matter).
On 12 Mar 20, the death cross happens again. And if you belongs to the EMA camp, then you would be doing nothing till the price action comes up to the 200 EMA level or 26000 price level. That is almost 44% from the bottom that you would have missed had you longed.
How about those using trend lines ? As the bearish trend line has been broken at 21602 level, we can consider taking a long position and ride to current price of 23504, making a tidy sum of profits.
You can trawl through the charts as far as back 2017 and you would see that I am a proponent of using moving averages. However, along the way, I find it difficult to make a decision to buy or sell as price actions hover around the line. By drawing a straight line, it offers me clarity and there is no grey area. Probably, that is how I started my journey of using trend lines and it has served me very well thus far.
By no means, this comparison is to rain down on those who use EMA as a trading strategy but this is a reflection of my own trading journey. I welcome anyone who excels at using the EMA to throw lights on my charts and offer constructive suggestions.
Like I always said, stick to what you are comfortable with ( you will know after a while) and most importantly, make money for you. Just because the fund managers are using EMA does not mean you have to. I have friends who solely rely on watching the price actions while others profess their loyalty with Bollinger Bands or RSI,etc.
How many should you use ? Again, I can't say as I had also used RSI, MACD and many others. My IQ could not comprehend all these and I spent much more time than I needed on my chart. It is conflicting all the time and I became paranoid , not knowing to buy or sell.
Trend lines has been clean and straight forward for me thus far. It is my lack of discipline sometimes that sway from the rules rather than the rules disappoint me.
Hope those who like using Trend lines can share your views what you like or dislike about it. This way, we can learn from one another and improve our trading skills.
In this chart, you can see on 20 Dec 18, there was a death cross pattern. And if you use the EMA indicators, you are likely to sell and make over 12% profits.
But in the case of using the trend lines, you would still hold on to your positions as it has not broken down at all. Again, it is on hindsight as we are passed that stage now and looking at present price action. And because you hold, you probably would have seen your profits soar to the price level of 29508 (whether you take profits before the plunge down is another matter).
On 12 Mar 20, the death cross happens again. And if you belongs to the EMA camp, then you would be doing nothing till the price action comes up to the 200 EMA level or 26000 price level. That is almost 44% from the bottom that you would have missed had you longed.
How about those using trend lines ? As the bearish trend line has been broken at 21602 level, we can consider taking a long position and ride to current price of 23504, making a tidy sum of profits.
You can trawl through the charts as far as back 2017 and you would see that I am a proponent of using moving averages. However, along the way, I find it difficult to make a decision to buy or sell as price actions hover around the line. By drawing a straight line, it offers me clarity and there is no grey area. Probably, that is how I started my journey of using trend lines and it has served me very well thus far.
By no means, this comparison is to rain down on those who use EMA as a trading strategy but this is a reflection of my own trading journey. I welcome anyone who excels at using the EMA to throw lights on my charts and offer constructive suggestions.
Like I always said, stick to what you are comfortable with ( you will know after a while) and most importantly, make money for you. Just because the fund managers are using EMA does not mean you have to. I have friends who solely rely on watching the price actions while others profess their loyalty with Bollinger Bands or RSI,etc.
How many should you use ? Again, I can't say as I had also used RSI, MACD and many others. My IQ could not comprehend all these and I spent much more time than I needed on my chart. It is conflicting all the time and I became paranoid , not knowing to buy or sell.
Trend lines has been clean and straight forward for me thus far. It is my lack of discipline sometimes that sway from the rules rather than the rules disappoint me.
Hope those who like using Trend lines can share your views what you like or dislike about it. This way, we can learn from one another and improve our trading skills.
Отказ от ответственности
Все виды контента, которые вы можете увидеть на TradingView, не являются финансовыми, инвестиционными, торговыми или любыми другими рекомендациями. Мы не предоставляем советы по покупке и продаже активов. Подробнее — в Условиях использования TradingView.