Ma analysis isn’t simple to master despite its many advantages. It is common for mistakes to occur in the process, leading to untrue results that can lead to grave consequences. It is essential to avoid these errors and be aware of them to maximize the value of data-driven decisions. The majority of these errors are caused by omissions or misinterpretations. They can be easily rectified when you establish clear goals and encourage accuracy over speed.
Another common error is to believe that a variable is generally distributed, when it isn’t. This can result in over- or under-fitting their models, which can result in a decrease in the confidence levels and intervals of prediction. In addition, it could cause leakage between the test and the training set.
When selecting an MA method it is important to choose one that suits the requirements of your trading style. A SMA is best for trending markets, while an EMA will be more reactive. (It removes the lag in the SMA because it gives priority to the most recent data.) The MA parameter should be carefully considered based on whether you are seeking either a short-term or long-term trend. (The 200 EMA would be suitable for a long-term timeframe).
It’s important to double-check your work before you submit it to be reviewed. This is particularly true when dealing with large volumes of information, since errors are more likely to occur. Having a supervisor or colleague look over your work can help you identify any errors that you could have missed.