Great. I'm kinda adding one piece of the puzzle at a time. Pretty happy with my EMA SMA crossover for now, and I'll start adding Hammers into the mix as well. Simple to add them on ToS to the chart, longer the wick the better the signal on those right? Does one read Hammers the same at support and resistance generally? I was under the impression hammers at support were a helpful buy signal, but when they appear at resistance, isn't that shape usually read as a hanging man, and therefore more of a sell signal?
Moving Averages discussion
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Great. I'm kinda adding one piece of the puzzle at a time. Pretty happy with my EMA SMA crossover for now, and I'll start adding Hammers into the mix as well. Simple to add them on ToS to the chart, longer the wick the better the signal on those right? Does one read Hammers the same at support and resistance generally? I was under the impression hammers at support were a helpful buy signal, but when they appear at resistance, isn't that shape usually read as a hanging man, and therefore more of a sell signal?
Good questions on the Hammers.
https://www.elitetrader.com/et/thre...st-right-here-baby.335635/page-5#post-4925440
https://www.investarindia.com/blog/candlestick-chart-patterns-hammer-inverted-hammer-hanging-man/
I use the term hammer to include inverted hammers, shooting stars, hanging man with the simple proviso that the wick be twice as long as the body or more. As for the behavior at highs vs lows, and wick length vs P/L, that's why you want to view charts and track on your spreadsheet what you have seen on your charts with your interpretation of a setup_that_has_written_instructions.
The questions are good ones. After a couple hundred examples you'll have enough info to know what to expect. Screenshots can be good to have around to help fine tune where setups didn't behave as expected. Do Not ignore these. Track them even closer. Here's where you learn a lot, the ones that don't work. You can notice whether long hammer setups work differently than short hammer setups. Believing what you read or hear is folly, get the ocular proof, lol.
That's why using fast charts like 1 minute, 2, 5, 10, 30min MNQ charts or 30min CAD/USD, EUR/USD, GBP/USD futures charts to shop setups can be a good option. These fast charts will produce many signals and save the time and hassle of chasing around for chart examples before the setup is in the 'May Have Promise' pile. A trader can look back and see the move that resulted from many many setups over time and reject those that do not get the job done. (M)NQ is a spaz and not the easiest to trade. If your setups work there, they are liable to work under similar conditions on any liquid product, gold may be the exception, lol.
Questions will arise, like how close does the hammer need to be to Support Line to qualify on a 1m chart vs a 30m chart? How many ticks on NQ, on GBP, are close enough? While you are in 'shopping mode' is the time to find this out, because when your cashola is on the line, you might be kinda thinking about other stuff, lol.
I'd be interested in more about your use of ma crossovers, that's a topic i know zero about but there's a number of posts on ET from traders that watch them.
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Love ocular proof, nice phrase! Gonna borrow that. I'll start watching hammers more carefully and go back and reread the sections on them in the couple candlestick books I've read so far.
On MA crossover, I don't know if this is sound or not, but here's been my reasoning. I learned early that 200SMA is the gold standard baseline SMA, but with the crash in March and all the high volatility since, I kept finding it wasn't telling me much of anything, couple times it was so far removed from current price range it literally didn't show on the chart lol. So I've just gone with much shorter MAs in general, 25 tops, and then experimented with EMA crossovers up or down thru SMA as possible buy/sell signals. I'm still kinda in the backtesting phase with that, but it seems helpful so far.
On MA crossover, I don't know if this is sound or not, but here's been my reasoning. I learned early that 200SMA is the gold standard baseline SMA, but with the crash in March and all the high volatility since, I kept finding it wasn't telling me much of anything, couple times it was so far removed from current price range it literally didn't show on the chart lol. So I've just gone with much shorter MAs in general, 25 tops, and then experimented with EMA crossovers up or down thru SMA as possible buy/sell signals. I'm still kinda in the backtesting phase with that, but it seems helpful so far.
This article is great, thanks! I've had the 50 and the 200 SMAs sitting on my chart with no idea what to do with them, this gave me good ways to think about those.
Some stocks just flow with the 50 SMA. Here are a few examples but this is not a recommendation.
JKS, PACB, KRA, NFE, NUAN, BBBY, QNST, LOB, TXG, TTGT, PTON, HIBB, PTON, DLTH, FRHC
Believe you me, some of these will break the 50 SMA.
I traded on FSLY, OSTK, TIGR, LL, and PACB using the 50 SMA. 3 wins and 2 loses.
JKS, PACB, KRA, NFE, NUAN, BBBY, QNST, LOB, TXG, TTGT, PTON, HIBB, PTON, DLTH, FRHC
Believe you me, some of these will break the 50 SMA.
I traded on FSLY, OSTK, TIGR, LL, and PACB using the 50 SMA. 3 wins and 2 loses.
Are you continuing to use moving averages?
Yep, I can see why one would move on from MAs eventually, but I feel like I need them for now while I'm still just learning how to draw valid trendlines and identify support/resistance. Had a good week. Only made 5 small trades, 3 good gains, 2 very small losses. I still like this buy/sell signal system I've come up with, but I feel like I'm still really bad at identifying 3 or 4 good stocks to focus on watching for the day. Think I'll start a thread on premarket scanning next, seek advice on that.