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Moving average length setting strategy

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Nick Goold

Choosing the best moving average period for your trading strategy can significantly improve your results. With so many options available—5, 10, 50, 200, and more—it's crucial to align your moving average length with your trading style and goals. A well-chosen moving average helps identify trends, support/resistance levels, and trade timing. Here's how to choose the right moving average period through step-by-step analysis and testing.

Understanding Moving Average Periods

Moving averages (MAs) smooth price data to help traders identify the trend direction. They come in various lengths that can be categorized into three main types:

Short-Term Moving Averages (5–25 bars)

These are best for fast-paced strategies like scalping and short-term day trading. Common settings: 5, 10, 13, 21 bars. These MAs react quickly to price changes, offering fast signals but more noise.

Medium-Term Moving Averages (26–75 bars)

These are often used by day traders and short swing traders. Popular settings: 30, 50, 75 bars. They provide a good balance between trend sensitivity and stability.

Long-Term Moving Averages (76–200+ bars)

These are ideal for swing and position traders. Common lengths include 100 and 200 bars. These help identify major trend direction and long-term support or resistance zones.

Note: You can use either Simple Moving Averages (SMA) or Exponential Moving Averages (EMA) depending on how responsive you want your indicator to be. EMA reacts faster to price changes.

How to Choose the Right Moving Average Period

Step 1: Define Your Trading Style

There are three main trading styles:

  • Scalping: Very short-term trades, often minutes or seconds.
  • Day Trading: Trades last a few minutes to several hours, closed by end of the day.
  • Swing Trading: Trades last days to weeks, aiming to catch major price swings.


The chart timeframe and moving average period should match your trading style:

  • Scalping: Use 1–5 minute charts with 5–10 bar MAs.
  • Day Trading: Use 5–60 minute charts with 10–30 bar MAs.
  • Swing Trading: Use daily or weekly charts with 30–200 bar MAs.


Try different styles on a demo account before committing. The best trading approach depends on your time availability, personality, and ability to manage risk under pressure.

Moving Average Chart

Step 2: Backtest Moving Averages Using Historical Data

Once you've chosen a trading style, test various MA lengths on historical charts. Tools like MetaTrader 4 (MT4), MetaTrader 5 (MT5), or TradingView can help you:

  • See how different MA settings would have performed in past market conditions
  • Compare win rates, average returns, and risk metrics


Warning: Backtesting is useful but not perfect. Market conditions change. Just because a setting worked in the past doesn’t mean it will work in the future. Focus on consistency, not perfection.

Step 3: Validate on a Demo Account

After backtesting, practice your MA strategy in real-time using a demo account. This step is crucial for:

  • Testing how you respond to market movement
  • Seeing if your strategy works during different sessions or news events
  • Building confidence before risking real money


Continue trading in the demo account until you achieve consistent profitability over several weeks.

Step 4: Go Live with a Real Account

Once you’ve found a moving average setup that works for your trading style, gradually start trading on a live account. Begin with small position sizes. As confidence and performance grow, you can scale up your trades.

Always monitor results and make adjustments as needed. If the strategy starts underperforming, reduce trade size and review your rules. Trading is dynamic, and adaptability is key.

When to Change Your Moving Average Period

If your strategy starts losing, it’s tempting to immediately blame the moving average setting. But before changing the MA period, ask yourself:

  • Am I following my trading plan strictly?
  • Am I entering too late or too early?
  • Is my risk management consistent?
  • Am I letting emotions affect my trades?


Often, it’s not the moving average that’s the problem—it’s trade execution or discipline.

Once you've ruled out those issues, you can begin adjusting your moving average period. Here's how market conditions affect which MA length might work best:

  • Strong trending markets: Shorter moving averages (5–21) can generate more signals and larger profits.
  • Range-bound or choppy markets: Longer MAs (50–200) reduce noise and help avoid false signals.


Tip: Avoid frequently changing your MA settings. Too many changes will reduce consistency and increase confusion. Instead, understand the strengths and weaknesses of your chosen MA and trade accordingly.

Key Takeaways

  • Match your MA period to your trading style and timeframe
  • Backtest thoroughly, then validate with a demo account
  • Use shorter MAs for trend strength, longer MAs for stability
  • Stick with your plan and avoid changing settings emotionally


The moving average is a simple yet powerful tool—if used correctly. With the right approach and discipline, you can turn your moving average into a consistent edge in the markets.

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