Quote from: Crypt_Current on May 07, 2013, 12:23:04 PM

...

Great answer on the first, least important part of the question.
The SECOND, arguably more important part, is WHY those PARTICULAR numbers.

The answer is so that Goomboo knows how everyone is trading and can adjust his own trades accordingly.

I don't think that is fair to say. The advice was indeed to use these numbers, but no one is forced to follow them blindly. Actually these numbers mean absolutely different things depending on the periods one chooses to trade in (ie. hourly/daily bars), something which Goomboo only shared his preference.

Quote

Can someone explain, for a non-trader, what do these EMAs stand for? Why 10 and 21 and not 14 and 47? Just curious, I've been watching these averages for the past few days and the accuracy at which they predict where the prices are going next is pretty striking.

I am no expert in any of the fields but as far as i get them the times they cross each other should not be looked at as future predictors, but as synthethisers of the past. As i have observed them, even if they're, at a certain moment, very prone to cross this can change and the "very likely" crossing turns out to _not_ happen. Basically they smooth over the discreet highs/lows changes that happen over time. The higher ema value more significance is given to the precedent and less likely it is to be affected in a sudden market move (to which you may then become exposed).

This is not to say that there isn't any influence if everyone start using the same numbers under the same time periods. But one may achieve very surprising results with totaly different numbers too. Ultimately there is a pair of numbers _and_ period which will be more efficient than any other. My view is, Goomboo advice is generaly very solid not because it predicts what will happen but because it will safeguard from catastrophe.

bitg

Posts

Merits