JSOP, but wouldn't a moving average indicator be one that does NOT go out the door in a black swan event? By black swan event I think you are talking about some huge, very unusual event in the market. Let's say we have a 60% decline in the market later this year. Well, if you were using a moving average, and sold either when markets when below that moving average or when that moving average turned down, wouldn't you have avoided the vast majority of that drop?
Anyone use moving average indicators?
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JSOP, but wouldn't a moving average indicator be one that does NOT go out the door in a black swan event? By black swan event I think you are talking about some huge, very unusual event in the market. Let's say we have a 60% decline in the market later this year. Well, if you were using a moving average, and sold either when markets when below that moving average or when that moving average turned down, wouldn't you have avoided the vast majority of that drop?
Yes that's when the black swan event happened to move the market in the same direction as your trade. What if it moved the market to the opposite direction of your trade? Let's say the general trend had been going down and you were rightly short according to the signal given by the moving average indicator, and then all of sudden a positive black swan event happened that pushed the market WAY up through the roof, you would've been not only short-squeezed but possibly margin-called. That previous signal given by the MA indicator was moot. This is what I was trying to illustrate.
Wowzers, panzerman, John Ehlers indicators look complex. Are you aware of any place that calculates them for you? I'd like to look at some charts with them. Thanks!
Which moving average indicator(s) do you use Peter10, and how do you use them? Thanks!
Thanks JSOP. I think the key here would be to be watching the market like a hawk, and when it turned north, make sure you catch it as soon as it passes through the moving average so you cover (or go long) and thus miss the huge short squeeze? I think the big worry would be like an overnight change in the market. For example, you are long, and the market opens down 10%, and is already far below the applicable moving average level you are using. Do you sell? Hurts either way if you are wrong!
Thanks SimpleMeLike. Do you know of any good (cheap also good, free even better) back-testing software or what not? Thanks!
Thanks tomorton! So, one might come up with a trading system something like, if all 4 are above, go long, if all 4 are below, go short, if they are mixed stay flat? Curious - did you come up with these by backtesting, or by just trial and error, or are these some popular moving averages to use? Thanks!
Yes, If all 4 are fulfilled I would consider going long, but then also review the weekly charts to see how consistent and how long the trend is.
Getting my criteria lined up has been trial and error. The hardest part was -
1 - stopping chasing reversals
2 - eliminating all the other TA that people tell you is important, like s/r lines, trendlines, round numbers, MACD, RSI, stochastics, candlestick patterns and all the rest
D1, Daily chart 1 candle is a day's movement.
Envelope or MAE, just put it on a 1 Min chart you'll find them, standard charting tools.
BB 9sma 2.2 setting will work for all Timeframes pretty much.
How to use gets TRICKY!!
Yes, NinjaTrader 8 (it free to trial for like 30 days) is what I been using to write some simple ideas to back test. It does take some time, but it is fun. You can always get 2 trials for free. Once you get historical (5 years or so) data downloaded to your computer, you can back test for free as much and as long as you want. You only pay when you ready to go live with your automated system.
I been using the free data and software for nearly 9 months to program and back testing ideas.