Moving Average Crossover
- Thread starter clarodina
- Start date
Use the median of the two MA's.
Bar Close > Go Long
Bar Close < Go Short
Hi folks
You comments about moving average crossovers got me thinking about my own approach.
I think you can make it work if you understand the limitations of moving averages in general..
A trader interested in using MA's needs to get intimate with the basics. You need to be able to answer the following questions
1. What are the differences between the most commonly used MA's?
2. How do you decide which length(s) of MA to use
3. Are crossovers the best way to go, or could one do better by using slope or combining MAs with other filters?
4. Do we understand the dynamic nature of MA's and how that benefits the trader intraday? (as opposed to a static intraday indicator like pivots for instance).
I was reading a book by Ben Warwick ("Event Trading" when it occured to me that I needed to get into the subject in order to find an edge (to see if there WAS an edge to be found). The author thinks that moving averages do in fact offer a tradeable edge if approached correctly.
I am constrainted somewhat in what I can say about my own system but I will say that I use longer MA's on several time frames and I do pay attention to crossovers but only in certain circumstances. Perhaps my comments and charts posted on the thread "Ideas for struggling traders" will help you...
Best of luck
Steve
You comments about moving average crossovers got me thinking about my own approach.
I think you can make it work if you understand the limitations of moving averages in general..
A trader interested in using MA's needs to get intimate with the basics. You need to be able to answer the following questions
1. What are the differences between the most commonly used MA's?
2. How do you decide which length(s) of MA to use
3. Are crossovers the best way to go, or could one do better by using slope or combining MAs with other filters?
4. Do we understand the dynamic nature of MA's and how that benefits the trader intraday? (as opposed to a static intraday indicator like pivots for instance).
I was reading a book by Ben Warwick ("Event Trading" when it occured to me that I needed to get into the subject in order to find an edge (to see if there WAS an edge to be found). The author thinks that moving averages do in fact offer a tradeable edge if approached correctly.
I am constrainted somewhat in what I can say about my own system but I will say that I use longer MA's on several time frames and I do pay attention to crossovers but only in certain circumstances. Perhaps my comments and charts posted on the thread "Ideas for struggling traders" will help you...
Best of luck
Steve
Here is simple approach to trade MA's crossovers .
1. Price Structure ( HH, HL) or( LH, LL) for trend direction
2. Draw Channel To see better price boundaries
3. In this sample 3/8 SMA's are used
4. For entry trigger make a box Swing High- SMA(8)= SMA (8) - Low for sell and SMA (8)-Swing Low= SMA(8)+High for Buy
5. Use channel lines as targets or if you don't like channels use MM's (Measured Moves )
6. Use channel lines for filtering in this sample trade 1
7.Use Entry trigger boundaries for Stop Loss
8,9, 10 You have to consider Volume ,time of the day News hours
for additional filters
<img src=http://www.elitetrader.com/vb/attachment.php?postid=1975908 width=800>
1. Price Structure ( HH, HL) or( LH, LL) for trend direction
2. Draw Channel To see better price boundaries
3. In this sample 3/8 SMA's are used
4. For entry trigger make a box Swing High- SMA(8)= SMA (8) - Low for sell and SMA (8)-Swing Low= SMA(8)+High for Buy
5. Use channel lines as targets or if you don't like channels use MM's (Measured Moves )
6. Use channel lines for filtering in this sample trade 1
7.Use Entry trigger boundaries for Stop Loss
8,9, 10 You have to consider Volume ,time of the day News hours
for additional filters
<img src=http://www.elitetrader.com/vb/attachment.php?postid=1975908 width=800>
use MA crossovers for entry and nearest support and resistance for exits.
You know I hear a lot of folks saying that they use MA and some saying they dont use MA since they lag.
For the folks that use MA - 1min-5 min bars are extremely noisy. What kind of timeframes do you use?
For the folks that dont use MA - What kind of a crossever system do you use (If any that is)? Also how do you then get rid of the "lag"?
Thanks!
For the folks that use MA - 1min-5 min bars are extremely noisy. What kind of timeframes do you use?
For the folks that dont use MA - What kind of a crossever system do you use (If any that is)? Also how do you then get rid of the "lag"?
Thanks!
Every new trader has to test out a cross over strategy.
Here's one in EasyLanguage.
#11 on the list:
http://www.elitetrader.com/vb/showthread.php?threadid=146049
Here's one in EasyLanguage.
#11 on the list:
http://www.elitetrader.com/vb/showthread.php?threadid=146049