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TFC Commodity Trading Forum

Re: Corn.../March Sugar Chart/Gian

The only issue with moving averages is like all indicators they have a serious character flaw. And with moving averages that flaw is they are not reliable when the market is not trending one way or the other. So in sideways markets they will simply also track sideways with price and whipsaw back and forth giving off false crossovers. Same with MACD or anything made up with moving averages. And with markets only trending 30% of the time historically that can be a problem especially with shorter term moving averages. The longer term ones don't tend to track sideways often due to their length and with price breaking up or down after a reasonable time of channeling. But a combination of things together can be more reliable to offset certain character flaws of an indicator as well.