Can Moving Averages help in any way ?

I use SIMPLE MOVING AVERAGES on my charts all the time. Ratio of 1:4 or 1:5 in selecting multiple moving averages is well observed amongst Technical Analysts must also be said.

Commonly used on daily charts are 50 and 200 period SMAs.

50 defines the MEDIUM TERM TREND and 200 defines the LONG TERM trend on the daily charts. The ratio is 1:4 here.

On my daily charts, I also use 10 period SMA to define the short term trend. At times there are some sharp and decisive counter cyclical moves where an analyst/trader takes a short term view in their analysis. SMA can be very helpful on that front in my opinion.

For example we look at the current OZL daily chart with 10 period SMA. First candle where the price action closed below it (highlighted with Pink) changed the short term to bear, which signalled a trouble in the short term, suggesting an action of some sort.

May be worth studying them.



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