Simple Moving Average

[Billbot]

I'm obviously doing something wrong here but the values showing for the Simple moving average on my charts seem to be different to the actual values (from google/various experts charts). What am I doing wrong?

E.g. on the US500, I get the 200 day moving average to be 4250 on my chart but 4328 seems to be what google says?

 

[ItsAlex]

Hi Billbot, the chart price you see on IG charts is always different from the underlying market. If you look at the bottom left of any IG chart you will see "Data is indicative". In the case of the US500 IG takes the price of the current ES (S&P 500 futures contract) and the next futures contract. They then do some adjustments resulting in the price you see on the chart.

That way they can offer you free real time data (access to real time market data costs a lot of money, in the case of markets trading at the CME the price is currently about 200$). If you need accurate readings (including LVL2), I would suggest you look for a data feed provider such as IQFeed or Rythimic and plug it to a professional charting package such as RInvestor+

[Billbot]

Thanks again ItsAlex. That makes sense but the descrepancy I am getting seems too big for this to be the reason (maybe I am wrong though). I also noticed on IG's chartingthemarkets today, Chris B's chart of US500 had the 200 day sma where it should have been according to google etc. which is quite a way out from my chart.

Can you tell me what you get for the 200 day sma on Nasdaq (daily chart for US500 doesn't load today for some reason) as of today on your IG chart?

[ItsAlex]

Yeah sure, the Nasdaq 100 E-mini September (current contract) 200 Daily SMA is @14072.50 (Data from IQFeed with a subscription to the CME). I have attached a daily chart if needed

On the IG platform US Tech 100 Daily SMA is @ 13528.55200 which was just crossed by price 💀.

Edited August 15, 2022 by ItsAlex

[Billbot]

Ok, that is what I get (so I am not doing something dumb). That is a big difference. There is not much use using it as an indicator if it is that far out then I guess. If everyone else in the trading world is using something different it is as good as useless no?

[Kodiak]

200 daily sma based on a 6 day week (including Sunday) use 33.3 weeks history

200 daily sma based on 5 day week use 40 weeks history

 

 

 

[Billbot]

Good point. So what do IG use?

You would think there would be a standard so everyone is looking at the same thing. If they all vary then it doesn't make for a very effective indicator I would have thought

[JezH]

I have just discovered this problem myself. I've been looking at the S&P 200-day SMA, and on the IG charts, it has already been breached last Friday and the price is well above now. However, on TradingView, MarketWatch, and the rest of the trading world(?), it has not reached it yet! WTF! And the discrepancy is not tiny, it is 'non-trivial', and therefore misleading.

Edited August 16, 2022 by jdh1602-2

[Billbot]

The response from IG's help desk is:

"When calculating the moving average we use our prices adjusted for spread in the MA formula. The difference would be caused by our spread adjustment and the MA you're seeing on other platforms uses the underlying Cash Price."

I still can't believe the descrepancy should be as big as it is

[JezH]

I called IG helpdesk myself, and I got a similar answer to you, Billbot. Maybe Kodiak, above, is right, but I haven't done the maths myself! Either way, if we look at our own 200-day SMA on IG, we are getting a different perspective to much of the trading world out there. 

Here's my solution (which perhaps is what many others do?). Change the day count setting from 200 to something higher (or lower in other circumstances?) so that it matches more closely to the 'standard' curve that the rest of the world is looking at! As of today, a 250-day SMA on IG looks close to the 200-day 'normal' SMA on other platforms! I'm guessing other 'standard' curves, may need adjustment, not sure.

[Billbot]

Good idea

[Billbot]

It doesn't seem to work with other indices. If the reason was because of including weekends it should remedy it on all indices.

If the reason is as IG say then it really is as good as useless (in fact worse) as an indicator on the IG platform.

[JezH]

For S&P500 and NASDAQ 100, i'm using 250, 185 and 125 on IG to roughly match 200, 150, and 100 on TradingView...but nothing beyond those 2 indices, This is not critical for me, but lately i have been completely misled by the IG curves compared to what market commentators were saying/showing. I think it may have been confusing me for years without me realizing it! Sad, but true.

[Billbot]

That's odd I tried on Nasdaq and it seemed to be well out. I am getting 14038 for 250 sma on IG. google is telling me it should be 13498. What are you getting? I notice on trading view the volume looks totally different to that on IG too.

[JezH]

I think you're comparing the NASDAQ Composite with the NASDAQ 100 🙂

[Billbot]

What a fool

[JezH]

I'm not sure if you can change the title of this thread, but if it said something like "Moving Averages on IG don't match other platforms", that would alert some other people to this issue. To be honest, i'm mildly disturbed by this discovery! 

[Billbot]

It won't seem to let me.

I agree, it is disturbing. I have been using it to some degree for years. No wonder I'm losing so much money 🤪

[JezH]

At least we've spotted it now, but i've probably been confused by this, from time to time, for the last 4 years 🤪