Does the moving average work with gold? Counted: "Buy on breakout" and "wait for a pullback to the moving average"
Verification notes | Counting gold's “common sense” Part 2
Moving averages are, I think, the indicator that the most people display on charts. “If above the moving average, buy; if below, sell,” “200 EMA is effective because everyone watches it,” “wait for a pullback up to the moving average before buying.” These are all common phrases you hear.
In the previous issue (Part 1), I showed that the gold intraday “trend day” occurs at roughly the same frequency as days on which price action is rearranged in a random order. This time, I will count the tool used to observe that trendwhether moving averages really work for gold
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Question: which tends to rise more, above the moving average or below?
From the 1-hour EMA20 (20-period Exponential Moving Average), when the price is significantly above it. Conversely, when it sinks below EMA20 (the so-called pullback). Which scenario tends to move upward within the next 60 minutes? And by how much is the difference?
