Hello All,
I've noticed that some prices can be either above or below the 210 Day MA line depending on chart interval selection (1 hour, 4 hour, daily etc.), but I'm unsure why this should be the case. I use the charts on IG's website and have selected 210 Day MA to align with 30 Week MA used in Weinstein's stage analysis.
I apologise if I'm being dense or missing something that ought to be obvious but can anyone explain the reasons for this?
Regards,
Ian
Different closing prices.
Consider a week where a share closes at 1,2,3,4,5
On a daily based MA the average is 3
On a weekly based MA the data point for the week is 5
Incidentally Weinstein used a 30 week Mansfield ma. This was a 'weighted' moving average. This discussion https://www.robertbrain.com/te... in turn hypothesises that a 21 week exponential ma most closely equates to this.
I've no idea how to equate this to days apart from having a target with a few shares and fiddling with the period.
Edit: I've assumed you can have 210 day ma on an hourly chart and changing the interval doesn't also affect the periodicity of the ma?
I think you've identified the key question in your last paragraph - Does chart interval affect MA periodicity? Although I believe the answer to this is yes because the MA line moves lower if the chart interval is reduced and moves higher when chart interval is increased.
For example, see today's FTSE 100 chart, all with the same 210 DMA but different chart interval.
FTSE Weekly
FTSE Daily
FTSE Hourly
By the way, thanks for the link regarding alternative 30WkMA
Hi Ian,
The unit of the moving average is applicable to the chart that you've selected, so if you choose a WEEKLY chart then it will show a 30 week MA (210 days) but if it's an hourly chart (i.e. 1 hour) then it would show a 30 hourly MA.
I plot the 10 Wk EMA and 30 Wk EMA - and only buy when the 10 is above the 30. Amazing how it keeps you out of buying downtrends - Bt (LON:BT.A)
This probably doesn't answer your question which has been dealt with by others, but I often find it instructive to compare the trends on MACD charts based on monthly, weekly and daily intervals (this can be done easily both on Stockopedia and IG). It's one way of checking that the short term trends and longer term trends are moving in the same direction (although this can also be done with multiple moving averages on the same chart which is easier to do with Stockopedia than IG). When the long and short term trends are all going in the same direction, it arguably improves the chance of a successful trade.
Hi hugehit,
If I understand this, the selected MA is equivalent to chart interval, i.e. a 30x MA is 30 hourly MA on an Hourly chart and 30 Weekly MA on a Weekly chart.
If so then my confusion lies in the reference to 210 Day MA regardless of chart interval although I accept that this is really a question for IG customer support.
Thanks for the 10 & 30 EMA tip.
Ian
Hi wilkonz,
Thanks for the MACD tip. I generally use fundamentals for my research and only apply technicals for entry/exit points although I am experimenting with TA for stock picks.
I have not progressed on to MACD or other more exotic technicals yet but will definitely consider your comments when I do so.
Regards,
Ian
