Ma analysis isn’t easy to master despite its many advantages. It is common for mistakes to occur in the process, resulting in incorrect results that could have serious consequences. It is important to avoid making these mistakes and http://sharadhiinfotech.com/4-ma-analysis-worst-mistakes/ recognize them to maximize the benefits of data-driven decisions. The majority of these mistakes result from omissions, or misinterpretations. These can be easily corrected by setting clearly defined goals and promoting accuracy over speed.
Another common mistake is to believe that the variable has normal distribution even though it doesn’t. This can lead to over-/under-fitting their models, which can result in a decrease in the prediction intervals and confidence levels. It could also result in leakage between the test and training set.
It is crucial to choose an MA technique that is compatible with your trading style. A SMA is the best option for trending markets, while an EMA will be more receptive. (It removes the lag of the SMA since it gives priority to the most recent data.) Furthermore, the parameter of the MA should be chosen carefully based on whether you are looking for a short-term or long-term trend (the 200 EMA would suit a longer timeframe).
It is crucial to double-check your work before submitting it for review. This is especially true when working with large amounts of data, as mistakes are more likely to occur. A colleague or supervisor examine your work can also help you identify any errors that you may have missed.