Best Moving Average Settings Based on Your Trading Style

Jasper Osita - Market Analyst

2025-07-23 09:39:04

This is Part 2 of our Moving Averages Series

If you're just starting out and want to first understand what moving averages are, how they work, and why traders use them - read Part 1: Moving Averages for Beginners before diving in.

Goal of This Lesson

To help you choose the right moving average (MA) setup by understanding your trading style, so you can either confidently apply proven setups or personalize them into something that truly fits the way you see the market.

Real-Life Analogy: MAs Are Like Eyeglasses for Price

Imagine walking into an optician and borrowing your friend’s glasses.

They might work, but if the prescription isn’t quite right, everything feels off.

That doesn’t mean their glasses were bad - it just means you need your own lens.

Moving averages are similar.

A 9 EMA or 21 EMA might work great for someone else - and it’s totally fine to start there.

But over time, the best traders learn to tweak their tools to match how they see the market.

It's Smart to Learn From Others - Then Adapt

Take a note of this:

Many great traders learned by studying others. Copying a mentor’s setup isn’t wrong - it’s wise.

But here’s the key:

Don’t stop at copying. Evolve what you learn into something that makes sense for you.

And that starts with knowing your trader type.

Step 1: Discover Your Trader Profile

Before choosing your moving average settings, ask:

Am I fast and reactive, or patient and selective?
Do I like quick momentum entries or multi-day trend plays?
Do I hold through noise, or want to be in and out?

To get clarity, read: Discovering Your Trader Profile

It’s a quick guide to identifying your strengths, preferences, and pace - so you can choose tools that work with you, not against you.

Step 2: Match Your Moving Averages to Your Trading Type

Once you understand your style, you can choose MAs that match your rhythm:

Trader Type	MA Setup	Why It Works
Scalper	9 EMA + 20 EMA	Fast reaction to momentum shifts
Day Trader	20 EMA + 50 SMA	Balance between speed and confirmation
Swing Trader	50 EMA + 200 SMA	Smoother trend following, filters noise
Momentum Trader	21 EMA + 100 EMA	Clean impulse tracking, avoids choppy zones
Mean Reverter	20 SMA + Oscillator (RSI, MACD)	Helps fade extreme moves back to equilibrium

Pro Tip: Use one fast EMA for entries, and one slow SMA for trend bias.

Common MAs and What They Do

MA Type	Best For	Description
EMA (Exponential)	Momentum setups	Weighs recent candles more heavily - faster reaction
SMA (Simple)	Trend structure	Averages all candles equally - smoother movement
200 EMA/SMA	Institutional bias	Common long-term trend guide
9 EMA	Pullback entries	Great for quick reaction in trends
21 EMA	Balanced system	Widely used across trading styles
20 SMA	Mean reversion	Pairs well with RSI and Bollinger Bands

Step 3: Observe and Journal Your Findings

Open your charts and watch how price reacts around your MAs:

Does it bounce cleanly?
Does it chop through?
Does structure align with your MA?
Do you feel more confident using them?

Create a simple journal or screenshot log:

Date
Asset
Timeframe
MA reaction (rejection, breakout, fakeout)
What you learned from that moment

Over time, you’ll spot patterns - and those patterns become confidence.

Bonus Tip:

If you're unsure which pair to start with, try the 20 EMA + 50 SMA combo on the 15-minute or 1-hour chart. It's widely used, balanced, and beginner-friendly - making it a strong default while you learn.

Why the lower timeframe? It’s faster to learn if you practicing learning while the candles are printing much faster compared to a much higher timeframe like the 4-Hour, Daily, and Weekly

The Role of Timeframe & Volatility

A 20 EMA on a 1-minute chart behaves very differently than on an H1 chart
Fast pairs (like NASDAQ or GBP/JPY) may need quicker MAs
Slower markets (like EUR/CHF) can use wider settings

Always match your MA speed to the asset + timeframe combo you’re trading.

Chart Example

This is your space to bring theory to life. Consider showing:

A breakout of price action

A clean pullback entry using 20 EMA on NASDAQ

A trend continuation using the 50 SMA until it flips

Pro Tip: Use Structure + MA confluence as confirmation for a higher probability setup

Strategies to Test With MA Setups

Strategy	MA Setup	How It Helps
Pullback Entry	20 EMA + 50 SMA	Buy dips, sell rallies in trend
Breakout Entry	9 EMA + 21 EMA	React to explosive breakouts
Trend Filtering	50 SMA + 200 SMA	Avoid counter-trend trades
SMC Confluence	21 EMA Only	Aligns with BOS/CHoCH and FVG zones

Common Mistakes to Avoid

Using too many MAs and clouding your chart
Entering just because price “touched the line”
Not aligning MAs with structure or price action
Ignoring timeframe when choosing MA settings

Final Thought

Copying someone else’s system is a great starting point - but the best traders evolve what they learn into something that reflects their mindset, lifestyle, and style.

Moving averages aren’t magic. They’re not predictors.

They’re just tools - but when they match your rhythm, they become powerful.

So whether you’re scalping, swinging, or catching trends - choose MAs that make you feel in control.

Let them simplify your chart, not complicate it.

3 Simple Steps to Build Your MA System:

Read: Discovering Your Trader Profile - Understand how you naturally trade
Choose: Pick a 2-MA combo that matches your pace
Observe: Watch how price respects your MAs - and journal what you notice

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This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.

Autor

Jasper has been in the markets since 2019 trading currencies, indices and commodities like Gold. His approach in the market is heavily accompanied by technical analysis and of course, supported by fundamentals. He has a background in trading proprietary firms and has been teaching students how to navigate themselves in the markets from basic to advance concepts.

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Ceny jsou pouze orientační

Best Moving Average Settings Based on Your Trading Style

This is Part 2 of our Moving Averages Series

Goal of This Lesson

Real-Life Analogy: MAs Are Like Eyeglasses for Price

It's Smart to Learn From Others - Then Adapt

Step 1: Discover Your Trader Profile

Step 2: Match Your Moving Averages to Your Trading Type

Common MAs and What They Do

Step 3: Observe and Journal Your Findings

Bonus Tip:

The Role of Timeframe & Volatility

Chart Example

Strategies to Test With MA Setups

Common Mistakes to Avoid

Final Thought

3 Simple Steps to Build Your MA System:

Start Practicing with Confidence - Risk-Free!

Check Out My Contents:

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