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SEYKOTA's method?
- Thread starter billpritjr
- Start date
Both are applied to the chart. The MA's reflect end-of-day data, of price itself.
BUY when the faster (less days--> "5 day MA") crosses the slower MA from below. SELL POSITIONS HELD (or) SHORT SELL when then faster crosses the slower from above.
By their very nature, they follow the price, after the price has taken a new direction.
or, also known as, Trend Following
BUY when the faster (less days--> "5 day MA") crosses the slower MA from below. SELL POSITIONS HELD (or) SHORT SELL when then faster crosses the slower from above.
By their very nature, they follow the price, after the price has taken a new direction.
or, also known as, Trend Following
did you see his radial momentum site? that rocks too.....
one thing i disagree with (out of all the things i DO agree with) is his view on short term trading. he says that while transaction costs stay the same, the profit is smaller with shorter trends. he then concludes that it is more profitable to trade longer timeframes, because it is RISKIER to trade short term trends.
i don't know about you, but I've seen that the shorter the timeframe, the less risk is involved...for me at least.
while the profit is smaller with shorter trends, there are MORE of them. this more than offsets the profit/transaction ratio. the ability to consistently compound your money is being overlooked here, which makes short term trend following much more profitable in the end. but, hey, to each his own -- he's the market wizard and i'm the young grasshopper.
one thing i disagree with (out of all the things i DO agree with) is his view on short term trading. he says that while transaction costs stay the same, the profit is smaller with shorter trends. he then concludes that it is more profitable to trade longer timeframes, because it is RISKIER to trade short term trends.
i don't know about you, but I've seen that the shorter the timeframe, the less risk is involved...for me at least.
while the profit is smaller with shorter trends, there are MORE of them. this more than offsets the profit/transaction ratio. the ability to consistently compound your money is being overlooked here, which makes short term trend following much more profitable in the end. but, hey, to each his own -- he's the market wizard and i'm the young grasshopper.
Quote from billpritjr:
I chose 7/35 because it exhibited the best trend following characteristics without too many false signals or whipsaws.
Back in the 1950's, Richard Donchian "invented" the 5/20 MA cross method (amongst others), numerous studies and research since, shows that adjusting the time variables for each particular stock is probably a good idea, since each stock is its own animal.
You can take the 50/200 to the S&P 500 index for major bear/bull trend identification.
I tend to trade on the 1 to 3 month time frame, so my faster MA will be 5-10 days, and the slower will be 20-35 days.
NOTE: Some stocks just do not work well with MAs, you need some that trend for long periods, both up and down. To blindly buy a stock because its MA's crossed today is asking for trouble.
I know.....been there, done that!
fwiw....i actually believe that MA's in shorter time frames behave much better than those in longer term time frames. I trade intraday with the 34ema and it works beautifully with little false signals, if you take into account the time of day and other factors.
Quote from kgharris:
34ema on what time frame and with what stocks? Thanks!
1,2,5 min charts using 34ema on all charts. doesn't matter what trading vehicle you use. always stay on the same side of the 5-min, and only deviate this rule on the 1 or 2-min if there's space in between their 34ema and the 5-min 34ema. entries are very tight in that they are placed right at 34ema on smallest timeframe so if they are wrong, you know very quickly. does wonders with your p&l.
Hi Funky,
I have come across 34 ema based system in another site. I posted several questions to the author of the system but never received a reply. I hope I can learn from your experience of using 34 ema based system. Can you please answer the following questions?
1) What are the unique characteristics of 34 ema? i.e. why 34 ema rather than, say, 8 13 or 22 etc?
2) Can you illustrate with a chart and explain your point about the "space between" the 34 ema in 5,2,1 min charts?
3) Do you go long when the price goes above 34 ema and go short when the price goes below it? or, do you have specific entry and exit criteria?
I have been observing, on paper, both the short and long time frame versions of the 34 ema based systems in trading eminis. It certainly looks promising.
The settings I noticed on the 3 min 34 ema based system were: 3 min chart -- 34 ema-- 14 cci -- 5,2,2 stoch.
I certainly agree with your observations on the behaviour of 34 ema based systems in terms of their impact on p/l.
Thank you.
I have come across 34 ema based system in another site. I posted several questions to the author of the system but never received a reply. I hope I can learn from your experience of using 34 ema based system. Can you please answer the following questions?
1) What are the unique characteristics of 34 ema? i.e. why 34 ema rather than, say, 8 13 or 22 etc?
2) Can you illustrate with a chart and explain your point about the "space between" the 34 ema in 5,2,1 min charts?
3) Do you go long when the price goes above 34 ema and go short when the price goes below it? or, do you have specific entry and exit criteria?
I have been observing, on paper, both the short and long time frame versions of the 34 ema based systems in trading eminis. It certainly looks promising.
The settings I noticed on the 3 min 34 ema based system were: 3 min chart -- 34 ema-- 14 cci -- 5,2,2 stoch.
I certainly agree with your observations on the behaviour of 34 ema based systems in terms of their impact on p/l.
Thank you.