The role of moving averages is only one: to tell traders the current direction during a breakout market, which direction cannot be traded, and it is only a comparison.

Many people continuously change the moving average values or the size of K lines in hopes of obtaining a definitive trading signal, which is unscientific.

If the moving average value is too large, the period is long, and the sensitivity decreases. The trading frequency becomes lower, making it relatively less likely to be deceived by false breakouts, thus reducing the chance of falling into traps. However, the opportunities that can be captured also decrease, and there is a possibility that the market may have started significantly before being noticed. As the stop-loss and take-profit signals have decreased sensitivity, once the market goes wrong or reverses, the best withdrawal opportunity is often missed.

On the other hand, if the moving average value is too small, the period is short, and the sensitivity increases. Minor breakouts are easily mistaken for trends, and when encountering slightly larger fluctuations during stop-loss and take-profit, one must exit. Frequent trading makes it easy to be shaken out of major trend markets.

So what is the best approach?

First, try to use large value moving averages to correspond to small period K lines, such as the 60-line 15-minute K commonly used by traders, and then select segmented positions along the trend at intervals to achieve risk balance.

Second, use large daily moving averages to temporarily guide the current trend direction and avoid going against the market.

If currently in a fluctuating market, it is best to remain in cash and observe, as fluctuating markets are the nemesis of moving averages.

Click on the avatar to view the homepage and follow me, a free communication community, sharing various potential coins daily, helping you ambush various hundred-fold coins, allowing you to earn abundantly in this bull market and exit with a full pocket.