I'm looking at the eft EWT on yahoo finance chart, how come a month chart shows a different 200 ema than a 5 day chart 200 ema?!? what do i trust?
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(7 posts)
Loz4en
MemberPosted 1 year ago #jeffshepherd
MemberOn the monthly chart you are looking at the average of 200 months, on a 5 day chart you are looking at the average of 200 weeks (week = 5 trading days).
Posted 1 year ago #Donato
MemberPerhaps a more accurate way to look at it is this: You are looking at a 200 PERIOD moving average.
In your example above, each chart you are looking at is made up of different time frames. And each chart you are looking at will have bars or candles on it (hopefully you are not looking at a line chart). And each bar (or time period) will be representative of a different time frame. That time frame could be minutes, days, weeks, months, or years (etc).
Most charts will state on them what the time frame of the period (each bar) is, but I don't see it on the Yahoo charts; I'm looking at the Yahoo interactive charts. For example, on the five day chart, you would have to count the bars in each day and divide that into the minutes of the day to find out for sure how many minutes each bar represented.
Posted 1 year ago #mike0711
MemberIn the ETF Trend Following book, it suggests using the 200 ema but I don't think gives a time frame. Is there a "best" time frame for doing this?
Posted 1 year ago #Donato
MemberHi Mike . . .
I haven't read Tom's book, but from what I've gleaned from his web site, he uses a daily chart. That is, each candle on the chart represents one days trading.Unless you have a high tolerance for risk, I wouldn't recommend useing less that a daily chart. As far as a best time frame to use, ultimately, every trader finds what works best for them. I like to look at a 3 month chart and a one year chart. Except this last year was somewhat unique, so instead of looking at a one year chart, I find myself using a two year chart more often than not lately.
Looking at the chart of an equity in different time frames give you different perspectives, and I find that very useful.
Good Luck
Posted 1 year ago #Loz4en
Memberthx that makes sense now, etftrends analyzer gives a list of 200 month ema, is there any website that gives a list of 200 day ema for all the etfs? someone needs to write a software that screens 200 day ema for all etf and alerts the user
Posted 1 year ago #Donato
MemberSomething doesn't sound right; 200 months is over 15 years. Unless you are an institution with billions, or Warren Buffett, I think a moving average of that length would not be practical.
There is another piece of reality you need to consider . . . There are over 800 ETF's. Are you going to enter everyone when it meets your criteria? Again, that's just not practical for one man of limited resources to do. Besides, the charts of so many ETF's will look the same, the only difference being the scaling. Consider this, I think it is a much better approach:
Pick five or ten ETF's to follow and that's it. Pick ones with decent volume and a range of sectors; pick one each for tech, financial, agriculture, metals and solar (etc). You'll probably be much better off. For example, solar is really getting beat up right now. At some point, it will turn around. All you have to do is be there when it does; do not force the trade. I moved TAN up near the top of my watchlist just recently. The volume is actually just under my preferred lower limit, but the chart looks good. I am tempted to short it, but instead I'll take my time and wait for a long entry.
Stay away from the leveraged ETF's unless you are going to short them, whether bull or bear funds. Stay away from ETF's that use futures as the underlying asset; except maybe USO. I like USO, but that's just me.
Patience is the key. Don't make it harder than it is.
Good Luck
Posted 1 year ago #
