Ma analysis isn’t simple to master, despite its numerous advantages. Mistakes often arise in the process, leading to inaccurate results that can have grave consequences. Recognizing these errors and avoiding them is essential to unlock the full potential of data-driven decision making. Most of these errors result from omissions, or misinterpretations. These errors can easily be rectified If you set specific goals and promote accuracy over speed.
Another common mistake is to think that the variable has normal distribution even though it doesn’t. This can lead to over-/under-fitting their models, resulting in lower the confidence levels and intervals of prediction. It could also result in leakage between the training and test set.
It is essential to select the MA method that fits your trading style. An SMA is the best option for markets that are trending, while an EMA will be more reactive. (It removes virtual data rooms for real estate the lag in the SMA since it gives priority to the most recent data.) In addition, the parameters of the MA should be chosen with care, depending on whether you are seeking the trend to be long-term or short-term (the 200 EMA is suitable for the longer timeframe).
It is essential to double-check your work before submitting it for review. This is particularly true when dealing with large quantities of data, since mistakes are more likely to occur. A colleague or supervisor review your work will help you identify any errors that you may have missed.