Let’s start with the exponential moving average versus the simple moving average. Which moving averages are the best for the daily chart? Some of the most popular moving averages most commonly used on charts are the 5-day, 10-day, 20- day, 30-day, 50-day, 100-day, 200-day, and 250-day moving averages. Trend traders are looking at daily charts but with longer term moving averages for trades over days, weeks, and sometimes months. Swing traders primarily use signals off daily charts for trades over multiple days. The best moving average for day traders and short term traders will be the one that fits their own intraday time frame and the average time they want to hold a trade for scalping or day trading whether it is 1-minute, 5-minute, 15-minute, or an hour there is no universal answer, a trader needs to see what works best for them, moving averages with 5 multiples is a great place to start research: 5, 10, 15, 20, 25, etc. A trader may take a 5/20 or a 10/20 hour crossover or cross under for a very short term trade over hours or days. Short term overnight traders might use 1-hour charts. Moving average vertical slopes up or down can show the current intraday direction of price. Backtesting relative price action relationships between these moving averages from a historical perspective can help find an edge on the intraday chart. Scalpers will focus on 1-minute charts and lower, day traders commonly trade on 5-minute and 15-minute chart setups.Ī combination of the 5, 10, and 20-minute moving averages can be a great place to start with a chart for day trading strategies. Traders react in different time frames using the chart length for the time period of their trade.
The answer to “Which moving average is best?” is the question “What’s your time frame?” Moving averages are technical trading tools. They show trends on charts when they go vertical and can show that price is in a range when a moving average is horizontal.
Moving averages are not predictive they are reactive to price action.
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