There's no perfect moving average, only the right one for the job.
| SMA | EMA | |
|---|---|---|
| Speed | Slower | Faster |
| False signals | Fewer | More |
| Best for | Long-term trend filter | Entries and pullbacks |
| Popular lengths | 50, 100, 200 | 9, 20, 21, 50 |
Pro tip
Many pros combine both: a 200 SMA as the big trend filter and a 20 EMA for timing pullbacks.
Wick says
Big institutions watch the 200 SMA on the daily chart. When price touches it, the whole world is looking at the same line.
Key takeaways
- Use SMAs for the big picture, EMAs for timing.
- Stick to popular lengths, because that's what others watch.
- Don't optimise lengths endlessly; consistency beats perfection.