Community Forex Questions
Advantages and disadvantages of moving average
The key benefit of the SMA is that it provides a smoothed line that is less susceptible to whipsawing up and down in reaction to minor, transient price changes. It takes the SMA longer to respond to fast price fluctuations, which often occur during market reversal moments.
Because it is weighted to the most recent price movement, the exponential moving average responds to price changes faster than the SMA. This is especially useful for traders looking to trade intraday swing highs and lows since the EMA detects trend shifts faster than the SMA.
As a result of its increased sensitivity, the EMA is more susceptible to erroneous signals and is more likely to be whipsawed. The EMA is often used by intraday traders who trade on short time frames, such as 15-minute or hourly charts.
Because it is weighted to the most recent price movement, the exponential moving average responds to price changes faster than the SMA. This is especially useful for traders looking to trade intraday swing highs and lows since the EMA detects trend shifts faster than the SMA.
As a result of its increased sensitivity, the EMA is more susceptible to erroneous signals and is more likely to be whipsawed. The EMA is often used by intraday traders who trade on short time frames, such as 15-minute or hourly charts.
Apr 05, 2022 00:36