Trading E-minis using moving averages?
- Thread starter aspenboy
- Start date
indexes are non-trending most of the time.
or to put it in market profile -terms - they are trending "horizontally"
moving averages are lagging indicatos that tell you what has been happening. they tell you nothing about what will happen, UNLESS they are signaling the start of a trend.
since most of the time, indexes are not vertically trending - MA's tend to get you in late to the game and whipsaw you.
can a profitable system be designed SOLELY using MA's/ maybe, but with commissions and slippage, you are fighting a losing battle imo.
traders who trade order flow and are savvy are going to be making much of their money from traders who rely on lagging indicators to get them in a move. thank god for the lagging indicator players. they provide liquidity
i use MA's as a general barometer, just to help establish where the indexes ARE in relation to the past, but never as a trading signal
or to put it in market profile -terms - they are trending "horizontally"
moving averages are lagging indicatos that tell you what has been happening. they tell you nothing about what will happen, UNLESS they are signaling the start of a trend.
since most of the time, indexes are not vertically trending - MA's tend to get you in late to the game and whipsaw you.
can a profitable system be designed SOLELY using MA's/ maybe, but with commissions and slippage, you are fighting a losing battle imo.
traders who trade order flow and are savvy are going to be making much of their money from traders who rely on lagging indicators to get them in a move. thank god for the lagging indicator players. they provide liquidity
i use MA's as a general barometer, just to help establish where the indexes ARE in relation to the past, but never as a trading signal
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MA-CHRON
Probably more useful on dividend stocks ;
where many people are holding to collect dividends.
However @ the end of the day many traders don't want to sleep on derivatives;
so you may notice on the charts posted, longer term MA great for identifying main trend. Not useful as much perhaps for signals.
So yes you can find a use for 50.
However you have to aware some of the powers that be , like Don Bright trading company,
like to watch futures more than trade them &
says ''DONT place much faith in these trading indicators'
You do get whipsawed, but you can help stop some of the loss with a less mechanical approach to it.
I mean, you look at it enough, and you can sense patterns. When a trade is looking bad, why wait another X points for your system to officially tell you to get out. You knew where it was heading.
I like to be in-play at all times, regardless of where the longer term MA is, otherwise I miss some big moves that come from nowhere.
I mean, you look at it enough, and you can sense patterns. When a trade is looking bad, why wait another X points for your system to officially tell you to get out. You knew where it was heading.
I like to be in-play at all times, regardless of where the longer term MA is, otherwise I miss some big moves that come from nowhere.
I use EMA
13 of them a la Daryl Guppy
Periods:
3 5 8 10 12 15
30 35 40 45 50 60
200
The more you use them the more you devlop a feeling about the market using them.
GUPPY MMA TRADING RULES
The MMA indicator develops seven main trading rules, but remember it is not a stand-alone indicator. It is most useful as a cinfirming entry signal, although it can assist with timming exits. The signals should be confirmed with the results of other indicators and price plots.
The trading Rules for the Guppy MMA are:
1- When the bands from both groups begin th narrow down and converge prepare for price action as the agreement on valuation collapses. For those using the MMA in a swing trading approach a combination of long and short positions straddle the potential price action. When prices do surge, the losing position is closed and traders ride the winner.
2- Trade in the direction of crossover. Go long if the crossover is on the upsode. Go short or exit long position with downside crossovers.
3- Rapid separation of the two groups confirms the strength of the break-out.
4- The long-term average confirm the direction of the trend.
5- The bubbles created by the short-term group of averages show the favorable exit points. This can be short-term rally trades. Judging the trend top is difficult so look for the leading two or three averages to converge or come together above a widely spread long-term group. Confirm this early signal with other indicator reading.
6- False trend breaks are identified whem the short-term averages strike upwards towards a well-spread group of long-term averages. Treat these as rally trades, not trend trades.
7- Agressive traders move in anticipation of MMA break-outs. Conservative traders wait for confirmation.
book "Market Trading Tactics"
13 of them a la Daryl Guppy
Periods:
3 5 8 10 12 15
30 35 40 45 50 60
200
The more you use them the more you devlop a feeling about the market using them.
GUPPY MMA TRADING RULES
The MMA indicator develops seven main trading rules, but remember it is not a stand-alone indicator. It is most useful as a cinfirming entry signal, although it can assist with timming exits. The signals should be confirmed with the results of other indicators and price plots.
The trading Rules for the Guppy MMA are:
1- When the bands from both groups begin th narrow down and converge prepare for price action as the agreement on valuation collapses. For those using the MMA in a swing trading approach a combination of long and short positions straddle the potential price action. When prices do surge, the losing position is closed and traders ride the winner.
2- Trade in the direction of crossover. Go long if the crossover is on the upsode. Go short or exit long position with downside crossovers.
3- Rapid separation of the two groups confirms the strength of the break-out.
4- The long-term average confirm the direction of the trend.
5- The bubbles created by the short-term group of averages show the favorable exit points. This can be short-term rally trades. Judging the trend top is difficult so look for the leading two or three averages to converge or come together above a widely spread long-term group. Confirm this early signal with other indicator reading.
6- False trend breaks are identified whem the short-term averages strike upwards towards a well-spread group of long-term averages. Treat these as rally trades, not trend trades.
7- Agressive traders move in anticipation of MMA break-outs. Conservative traders wait for confirmation.
book "Market Trading Tactics"