Is MA (moving average) really useful?
Many people have gone through this stage, wondering what the appropriate setting of MA is, and how many lines are appropriate?
Few people think about the principle of MA, why it seems useful, what phenomenon it explains, and the difference between different parameter values. In addition to the difference in definition, what deeper meaning does it have?
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The role of MA is to establish the minimum buying and selling conditions for those who do not have trading rules. That's all. ————
Like other trading rules, this is not a "sure win method". There are winning rates and odds, and they are changing, not constant.
So, can the improvement of rules be solved by changing a few parameters or adding a few lines?
This is a good question.
Many people try it directly when they see that the parameters are adjustable without thinking, just like you think about what to fill in when you see a fill-in-the-blank question. This is just mental inertia.
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MA is just a linear curve of the average price. Different parameters just simulate the approximate value of the average market cost in this period for your reference.
The meaning of buying and selling near the moving average is that you are consistent with the transaction costs of other people in this cycle.
1 The direction of the moving average must follow the current price.
Just like the spot price must follow the futures price, it will only be slower and not necessarily synchronized at any time.
The lower the parameter, the smaller the cycle, and the more sensitive it is to the fluctuation of the current price.
Therefore, trading according to the average price is like buying and selling according to the spot price, which is less affected by the short-term changes in the futures price and is relatively easier to grasp the price trend of a longer period.
This is the basic principle.
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Therefore, 7 is more sensitive than 30, and 30 is more sensitive than 90, which are all based on the essence of explanation.
In the final analysis, this is still studying prices, filtering and smoothing fluctuations to a certain extent to take the average value.
How much fluctuation you are willing to bear is related to the parameter value.
The topic of which line is more effective is a bunch of nonsense. This is completely subjective and can be selected, not based on the results of testing the K chart.
Simply put, if your operation cycle is long and your tolerance for fluctuations is high, you should choose larger parameters; conversely, if your operation cycle is short and your tolerance for fluctuations is low, you should choose smaller parameters.
