Despite its many advantages, analysis can be difficult to master. Mistakes often arise in the process, leading to incorrect results that could have serious consequences. Recognizing these errors and avoiding them is essential to unlock the full potential of data-driven decision making. Most of these errors result from omissions, or misinterpretations. They can be easily rectified if you set clear goals and encourage accuracy over speed.
Another mistake that is common is to believe that a variable has normal distribution even though it doesn’t. This can result http://sharadhiinfotech.com/4-ma-analysis-worst-mistakes/ in models that are either over- or under-fitted, compromising confidence levels and prediction intervals. It can also lead to leakage between the test and training set.
When choosing the MA method, it is essential to select one that meets the needs of your trading style. For example, a SMA is ideal for trending markets while an EMA is more reactive (it removes the lag which occurs in the SMA by putting the emphasis on the most recent data). The MA parameter must also be carefully chosen depending on if you are looking for the long-term or short-term trend. (The 200 EMA is a good choice for a longer period of time).
It is essential to double-check your work prior to submitting it to be reviewed. This is particularly true when working with large amounts of data, since errors can be more likely to occur. You could also ask your supervisor or a colleague review your work to help you identify any errors you might have missed.