Which moving average settings work best, 50/200 or 20/50?
I am trying to choose moving averages for trend trading on the H4 chart. Which pair is better?
For education only. This is not financial advice. Trading carries a high risk of loss.
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1 Answer
Best answer
No setting is best for everyone. The 50 and 200 pair is slow. It shows the big trend, but its crosses (the so called golden cross and death cross) come late. The 20 and 50 pair reacts faster and gives more signals, but also more false ones.
Many traders use moving averages as a trend filter rather than as an entry signal, for example only looking for buys while price is above the 200. An EMA reacts faster than an SMA.
Pick one setup, test it on past data for your pair and timeframe, and keep it.
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