Ma analysis is not easy to master, despite its numerous advantages. In the process, errors can result in inaccurate results with serious consequences. Recognizing these mistakes and avoiding them is essential to fully harness the power https://www.sharadhiinfotech.com/4-ma-analysis-worst-mistakes of data-driven decision-making. Most of these errors are caused by omissions or misinterpretations. They can easily be rectified if you set clear goals and encourage accuracy over speed.
Another common error is to think that a variable is typically distributed, when it isn’t. This can lead to models that are either overor under-fitted, compromising confidence levels and prediction intervals. It can also lead to leakage between the test and training set.
It is essential to select the MA method that fits your trading style. For example, a SMA is ideal for markets that are trending, while an EMA is more receptive (it removes the lag which is present in the SMA by putting the emphasis on the most recent data). The MA parameter must also be carefully considered based on whether you are seeking a long-term or short-term trend. (The 200 EMA is suitable for a longer-term timeframe).
It is crucial to double-check your work prior to submitting it for review. This is especially true when dealing with large quantities of data as errors can be more likely to occur. The presence of a supervisor or a colleague to review your work will assist you in identifying any errors that you could have missed.