How to use MAD (Moving Average Distance)?

Question

Harvey · Accepted Answer

The distance between short- and long-run moving averages of prices (MAD) predicts future equity returns in the cross section. Annualized value-weighted alphas from the accompanying hedge portfolios are around 9%, and the predictability goes beyond momentum, 52-week highs, profitability, and other prominent anomalies. MAD-based investment payoffs survive reasonable trading costs faced by institutions, and are stronger on the long side relative to the short counterpart.

Christopher · Answer

Moving Averages are of different types, as like Simple Moving Average, Exponential Moving Average, etc. now its totally depends on which securities and time frame you are applying the selected moving average.Moving Averages trading style includes either use of single moving average or multiple moving averages crossovers, depending on the traders trading style and expected profit one need to select the length and timeframe for the moving average strategy, as well as moving averages strategies works well on trending stocks, sideways movement will definitely creates trouble for the traders to earn profits.for intraday you can use 8, 10, 21, 33 period moving averages, for short term 50 to 100 period moving averages are good, for long term 200 days moving averages are better.conclusion: stock selection is most important to trade using moving averages as like any other indicator available in charting software's.

William · Answer

Moving averages are the most very important indicators to use and predict and identify the trend of the financial instrument,I personally use 21 and 50 exponential moving average and rsi in a 10 minutes candle stick chart pattern it works perfectly fine for me in intraday,You can use any moving averages as of your choice for trading requirements, the higher time frame the lowest moving averages, the lower time frame the higher moving averages works better,I hope I did answer your question from the best of my knowledge, if you like my answer please upvote me.

How to use MAD (Moving Average Distance)?

6 Answer

6 Answer

How to use MAD (Moving Average Distance)?

6 Answer

6 Answer

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