MA is known na smooth siya na line pero mabagal magreact meaning late ka makakapasok at makakalabas. EMA known na mabilis magreact pero di siya ganun ka smooth or kadalasan choppy na picture makikita mo mostly false na signal makukuha mo like early ka mapapa exit or mapapa entry.
Para e bridge ang gap ng smooth pero mabagal at mabilis pero choppy nandyan si ALMA.
Arnaud Legoux Moving Average.
”The Arnaud Legoux’s version of moving average technical indicator was designed to address two common drawbacks with the traditional moving averages, responsiveness and smoothness. Anyone who has used a moving average would know that a short term moving average is more responsive, but comes at the risk of being choppy and can result in false signals. On the other hand, a longer term moving average is known to be smoother, but lacks in terms of responsiveness, meaning that price already makes a significant move before the longer term (smoother) moving average catches on.
So traders are generally caught between a fast and responsive but prone to false signals moving average, or bear with the long term smoother moving average which is often delayed when it comes to signals.
Technical traders have over the years tried to overcome this method, which is one of the reasons why you find quite a few two moving average strategies, where you essentially have a short term and long term moving average, thus looking to trade based off responsiveness and smoothness
The Arnaud Legoux moving average attempts to bridge this gap and thus is expected to show both responsiveness and smoothness at the same time. Interestingly, the Arnaud Legoux moving average applies the moving average twice, once from left to right and the other from right from left with the process said to eliminate price lag or phase shift significantly, a problem that is common to the traditional moving averages.”
Here are the pics (chart) Try spotting the difference.
General rule ng moving averages. Kapag nasa ilalim siya ng candle or ng price it acts as a support. Kapag nasa taas sya it acts as a resistance. So the most important thing na binabantayan natin lagi is yung pagbreak ng line. Pag nbreak ang line pataas breakout kasi resistance yun. Kapag pababa naman breakdown kasi support yun.
Now using ALMA is very easy. Buy kapag na break ang alma at ang price eh nasa taas ng alma and it stays there. Sell kapag nbreak ang alma at ang price ay nasa baba ng candle at it stays there.
I daytrade using ALMA. I just switch timeframes. I normally choose between 1-15 minutes as my timeframes depending on which timeframe shows a better picture with regards to candle formation. Kapag choppy sa 1 minute lipat sa 3 at kapag choppy sa 3 lipat pataas until maganda na formation ng candle. The stock i daytrade must and should have explosive volume. It doesn’t make any sense naman to daytrade a ranging stock or one with no volume. If i see a stock picking up volume (i studied/reviewed it a night before of course unless during the day bigla na lang umangat with a really really big volume) I plot alma. I find a good TF and trade it. ALMA will always give u an exit if you just respect the breaks. When support breaks, exit.
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