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Is the 260-day exponential moving average best for a medium to long term trader?

The detailed question was:

I am a medium to long term investor. I follow trends and use the Comsec Research site. I notice you use the E260 moving average line in some of your charts, is this the appropriate indicator for me to use and which term would you recommend for the check indicator (2nd option with comsec).

I think the 260-day Exponential Moving Average is most appropriate for medium to long term investors. The one year moving average has tested very well on stock markets over long periods of time. See Colby and Myers The Encyclopaedia of Technical Market Indicators.

However, I do not use it as a trading tool per se. By that, I mean that as a trading tool, a moving average is used to generate buy and sell signals. I use it much more loosely. What it tells me is:

If the moving average is rising and price is above it, then the trend is usually up, especially if it has broken out of a trading range. It sometimes gives you early warning before there are peaks and troughs forming on the chart to identify the trend directly.

The reverse applies for a downtrend.

It is also extremely useful for identifying which stocks trade in cyclical patterns and are therefore candidates for my value model. It can also make it easier to see the growth model stocks, though this is a secondary use for me.

I do not use Comsec, so I cannot help you with that. Sorry.

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