Best Moving Average SettingsThe Best Moving Average settings are based on

first choosing the Simple (SMA), Weighted (WMA) or the Exponential (EMA)

Here's the difference...

Weighted Moving Average (WMA)The most recent price gets the highest weighting and the

most distant price gets the lowest weightingWeighting decreases in EVEN STEPS from the most

recent to the most distant price

Simple Moving Average (SMA)All (Closing) prices get equal weighting

Exponential Moving Average (EMA)A type of WMA

The most recent price gets the highest weighting and the most distant price gets the lowest weighting

Weighting decreases EXPONENTIALLY from the most recent to the most distant price

SMA(Equal Weighting)

EMA(Exponential Weighting)

WMA(Evenly Stepped

Weighting)

1 2 3 4 5 6 7 8 9 100.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

Wei

ghtin

g

MostRecentPrice

Weighting

Most DistantPrice

Weighting

10 Period Moving Average Comparison Table

SMA

WMA

EMA

The SMA is slower than the EMAIt will give less signals than the EMA

+ve = Fewer losing trades-ve = Later Entry

Because it is weighted the EMA isfaster than the SMA

It will give more signals than the SMA+ve = Early Entry

-ve = More losing trades

The WMA is somewhere in between

No one knows which Moving Average is used the most and no one has proven if any one type is better than the other

Moving Average Responsiveness

Weigh up the advantages and disadvantages, the true answer is there is no BEST setting

The choice is yours!

Best Moving Average Settings

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