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Lynn,
Displacing a moving average forward will reduce whipsaws, without
as much of the detrimental slowing effect caused by using a
longer-term moving average... I use a displaced moving average when
determining trend.
Joe DiNapoli studied displaced moving averages when the concept
was still new, and has used them successfully in his 25 years of trading.
Joe will be available on-line at a forum on this web page on Wednesday:-
http://www.halcyon.com/scripts/tcorner/cgi-pvt/newtc-client
Best wishes,
-Neal.
At 07:14 PM 12/13/97 EST, MR LYNN G wrote:
>Below are a few comments about moving averages by traders. My question to
the
>group is how do you reduce whipsaws when using MA's? I know everyone has
>their special MA such as Simple, Weighted, Smoothed, Exponential, Displaced
>etc. and some prefer 2 MA while others like 3 MA. This is all fine but the
>big criticism of MA has always been the high number of whipsaws while waiting
>for a trend to start. Do you just accept the losses, knowing that a trend
>should bail you out.... or is there a way to filter the trades to reduce the
>number of losing trades?
>
>Also can MA be used profitably in daytrading or is it primarily for position
>trades?
>For daytrading, are there are changes necessary from position trading?
>Lynn
>PS List or private mail is fine.
> <<Since moving averages are in the long run profitable is it just they
><< are too boring for people to use or comment on? There is not a study
><< out there that seems to suggest the longterm use of moving averages
><< loses money. To quote Marty Schwatz "using moving averages works
><<better than any other tool I have".>>
>>
>> That is true, I use Moving averages. THey aren't sexy though, and they
>> aren't perfect, so many people feel there must be something better out
>> there. You know the attitude, if it is simple it must not work anymor
>
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