USE OF KMO (moving averages) AS SIGNALERS
1) the price WHEN the KMO curve splits upwards WE HAVE A MARKING SIGN UNDER THE PROVISION THAT THIS CURVE HAS A POSITIVE SLOPE (many places and books do not mention this critical point!)
2) the price WHEN the KMO curve is declining downwards, WE HAVE A BUY SIGN UNDER THE PROVISION THAT THIS CURVE HAS A NEGATIVE SLOPE (many places and books do not mention this critical point!)
3) when the pitch of the KMO is almost horizontal we do not make absolutely no movement! Because this horizontal slope suggests a "trading-side-band" with the resultant "upward" downward movement of the curve (almost perfectly horizontal) and the production of continuing loss-making operations.
ATTENTION in this case we will consult the oscillators who give over-sold and over-sold zone trading marks.
As we have seen, the curves, depending on the type of CMO that we will use, and the amount of "close", follow the price we have for those mentioned in this section in a series of "1" DEMA "Quick XMUMX" 2) linear LWMA (the fastest) 3) EMA exponential 4) SIMPLE 5) smothed OI 4-5 are the slowest ones.
1) As fast as KMO is, how much "sneak" is watching the price, but it falls into more "false" signals when we follow its partitioning cases.
2) As slow as KMO is, it does not produce all that false signals, but it also requires a wide loss of attitude in their execution.
From 2 above, it is obvious that we have to choose our analogies accordingly and, accordingly, with the amount of "loose" we stop to stand up (this is analogous to the risk we undertake and to the balance of our capital account).
TIME-LIMIT - period number
Timeframe selection is another issue that we are concerned with and the choice of "depth" of tracking, ie what width do we want? B.C. 5-20 periods, e.g. 30-90 100-200 Medium-Term Periods, and so on.
it depends on the available funds the risk we undertake to stop our investment and our investment temperaments (we are speculators with short time frames or we want a larger framework with what tools and fixed input signals
In the rest of the sections, we have a number of articles that will cover this subject, which is called a time frame choice.
CHARACTERISTICS OF A GOOD KMO
1A) A good CMO must smoothly monitor price developments and act as a support line in the ups and downs of the market and as a counterweight during its downward phases.
there is no specified number of time frame types that give the optimum mobile form at any time (although links to the variable have been attempted so far to produce an efficiently configured RMS)
An approximation is the one that meets the 1A attributes
ANTIMETOPISIS OF LIQUID SIGNS-FALSE DIAGNOSIS KMO
False fake signals are a very common phenomenon in the classic passage of KMO and are treated with filters that are
1) TIME We let eg 2-3 waxes even at the entrance and at exit "margin of tolerance" WARNING always with an extraordinary stop of some great damage we define in the inter-day variation of the candle!
2) QUALITY We rank a filter as a percentage as a "standard error margin"
3) NUMERICAL ENVIRONMENTS above the K.M.O as shown in the following graph EURUSD H4 from the selection levels of the integrated mobile average indicator of MT4 in the selection levels we set eg eg 500 & -500 5 which are give or take.