andypeters wrote:Yes, repainting is an issue however, 'laggy' is a term which needs definition in the sense that anything which is based on historic data could be considered 'laggy' simply because its based on info from the past. That doesn't mean it can't have predictive value.
the laggyness of an MA indi is based on its period, the bigger the period the more laggy it is. what I mean is the indi responds AFTER price moves. an MA direction might not start to reverse for several bars after price does, to the point that a relativly small retrace can trigger reversal trades just in time for price to resume its original move.....
MACD was invented to try to cover for this very deficiency.
Laggy indis try to give trade signals NOW based on old data, leading indis say what price you should enter when price gets there. Most people are impatient, so choose indis that give NOW trade signals.
As a comparison MOMO (a leading indicator) is apparent immediately the bar closes, and gives a good idea of where to consider entry at a later time.
Furhermore since iMA repaints its not useful until the value does settle...
I have personal experience with MA cross robots that enter on the bar immediatly after the cross, then the MAs repaint (or settle) and there has been no cross, a false entry causing loss in both directions (closing a good trade to open a wrong one)
Cluster indis are an MA cross indi when it boils down to it. Can someone please tell me how knowing that the average price for the last 13 bars being the same as the average price over the last 5 bars can possibly provide a trade signal? Especially when the cross is often caused by MOMO, and knowing that there is often a retrace after MOMO? Knowing that a MA cross delivered to the hands of the pros the classic newbie mistake of either buying after a rise in price into supply or selling after a fall in price into demand?