Trend... again....

[NHN123]

Hi everyone,

I was messing around with another charting package I have, and I found something called an End Point Moving Average.

I think what it does is takes a linear regression as opposed to price and averages that instead. It creates a very different look to a simple moving average.

I haven't really looked in any great detail yet, but it looks to be a good measure of trend.

Look at this chart- weekly GBPUSD. Very different plots on MA.

I would be interested to know if anyone else has ever used it before in their trading, and what they liked and didn't like about it.

Thanks
Nick

[Russell Stagg]

I haven't used End point but your right in that it looks like a regression type line. I like Regression lines BUT they can't be used like MA's - the whole reason an MA works is Because it lags - if you take a lot of that away (as you do in least square fits) then the original uses of the indicator are less valid.
Short story you will get a whole lot more whipsaws with linear regression if you are not careful in its use.

[Steve Griffiths]

Hi Nick

Yet another good example of why we can’t use “just one” method for the larger degree trend.

As I have outlined in the Trading Course, any trend indictor (by definition) will always be lagging so we must realize this and as such use WPT’s (which are leading) to “catch the turns” ready for when the STF (or whatever lagging oscillator) catches up.

In my 20+ years having these two approaches covers you far better and far more of the time and is the best approach overall…

I hope this helps ?

Steve

[NHN123]

Thanks Guys,

Just shows, even a year and a half after my original post, users of the forum and the MTP guys get round to delivering some good answers!:)