Daytrading With Moving Average Crossovers
- Thread starter larrybf
- Start date
Straight MA crossover systems have been backtested and results published loads in the journals. They work in trending markets and get chopped up in choppy markets. Besides what's already been published, the whole thing should be axiomatic if you just think about it a little. It's inherent behavior if you're using a single MA crossover.
That's usually what people mean when they say they don't work - because you can get whipsawed repeatedly during choppy/range bound markets. Those that say they do work are either merely focusing primarily on trending periods, are hyping something to sell you, or are using the crossover in conjunction with one or more other indicators to create a combination signal.
That's usually what people mean when they say they don't work - because you can get whipsawed repeatedly during choppy/range bound markets. Those that say they do work are either merely focusing primarily on trending periods, are hyping something to sell you, or are using the crossover in conjunction with one or more other indicators to create a combination signal.
I have been reading theposts and I really can't understand why guys like NihabaAshi and Arch Angel get stuck in their reasoning processes so easily.
Any indicator can be made to be usable with a little mental affort. Certainly this one can't be unique.
Any indicator can be made to be usable with a little mental affort. Certainly this one can't be unique.
Wow...I thought this thread was going no where.
Jack...can you contact larrybf and show him how MA Crossover can be made to be usable with a little mental affort because he truly believes MA Crossovers are not profitable for him...
in fact...they have caused him losses.
Please review his quote that started this thread...
Thanks.
NihabaAshi
I didn't say I had good ideas, just a lot of them. Here's what I'm working on. Since it is a well known fact that at times an ma xover system will whipsaw you almost perfectly, all I need to do is figure out the worst ma combo and I can fade it.
Then somehow, you need to figure out when not to fade it.
My closest one uses 3. You fade one cross and trade the next one. But it is not in the real money (or even play money) phase yet.
I have a long way to go.
Then somehow, you need to figure out when not to fade it.
My closest one uses 3. You fade one cross and trade the next one. But it is not in the real money (or even play money) phase yet.
I have a long way to go.
Can be used in many different ways, trend identification and crosses are just 2.
Using a longer avarage quite often there is a tension between the avarage and the price. The price gets too far from the avarage and the avarage can not keep up with the movement. So the price comes back to the avarage quite quickly and picks up the avarage before continuing in the same direction. This tension point is often a good place to trade contra trend for a point or 2 of retracement.
When the long avarage is going sideways in the chop, the price will return to the avarage and overshoot and then come back again. The quick that can read the market depth and volume being added and subtracted can pick the up the points of directional change.
Another is using 2 medium avarages one lagged from the other and playing the cross of the 2 same length avarages with a third avarage for confirmation.
Or use a stochastic to confirm.
Avarage of the avarage can be another (especially when using shorter lengths)
Many different ways to skin the cat - just have to understand what they are telling you
Natalie
Using a longer avarage quite often there is a tension between the avarage and the price. The price gets too far from the avarage and the avarage can not keep up with the movement. So the price comes back to the avarage quite quickly and picks up the avarage before continuing in the same direction. This tension point is often a good place to trade contra trend for a point or 2 of retracement.
When the long avarage is going sideways in the chop, the price will return to the avarage and overshoot and then come back again. The quick that can read the market depth and volume being added and subtracted can pick the up the points of directional change.
Another is using 2 medium avarages one lagged from the other and playing the cross of the 2 same length avarages with a third avarage for confirmation.
Or use a stochastic to confirm.
Avarage of the avarage can be another (especially when using shorter lengths)
Many different ways to skin the cat - just have to understand what they are telling you
Natalie
Jack - what are you talking about? "Stuck in their reasoning"??? As Joe Friday would say - it's just the facts ma'am.
If ANY indicator can be made usable - how about you apply "a little mental effort" and produce an RSI indicator that's profitably tradable in any market condition?
There's been loads of backtesting done on single indicators - none of them work profitably in all market conditions.
Using multiple indicators is another issue - but the thread was talking about using just a single MA crossover.
right, that's one of the easiest scalps. In an uptrend you can sell with all the weakest bulls behind you. Bulls selling behind you and bulls waiting to buy in front of you. wheee, gotta be quick!
And when you get all 3 lined up in a parallel line at a nice sloping angle, you know it's going to take something more than ordinary support or resistance to stop that train. Talk about contrarian, it takes a lot of guts to jump on that train after it's already been running 5 miles.
Nobody wants to do it because you know just as soon as you jump on those ma's are gonna cross on you.
1,2,3,4,5 what's the next number? 6 if I don't bet on it, otherwise 4.
Profitseer, be careful in deciding which set of moving averages.
is the best.
That may be formfitting. Yes it works perfectly on back data but not so hot into the future.
Robustness should be the deciding factor. So one wants to look for sets which are surrounded by nearby sets which all seem to produce good results.
THEN select the one in the middle. Probably not as good a result as a aprticular isolated set perhaps but more robust, more reliable.
I hope you understand what I am trying to say above.
The condtions can be judged by looking for small trading ranges.
Th moment one is in a small trading range one knows there is danger and that it may pay to stay flat.
freealways
is the best.
That may be formfitting. Yes it works perfectly on back data but not so hot into the future.
Robustness should be the deciding factor. So one wants to look for sets which are surrounded by nearby sets which all seem to produce good results.
THEN select the one in the middle. Probably not as good a result as a aprticular isolated set perhaps but more robust, more reliable.
I hope you understand what I am trying to say above.
The condtions can be judged by looking for small trading ranges.
Th moment one is in a small trading range one knows there is danger and that it may pay to stay flat.
freealways