Trailing stops using Moving Averages

Hi All,

Does anyone exit the trade using Moving Average trailing stop method? Have few questions like :-

1. Will the moving averages be different for different time frames. Like I know few people using 48 SMA on 1 Hr timeframe. So if I trade on 30 Min or 15 Min. Should it change accordingly?
2. Any standard value of moving average that can run on any time frame?
3. What is better to close the trade:-
A. Price touching the MA
B. Faster MA crossing over Slower MA. For Eg. 5 MA crossing 10 MA.

Appreciate any help in this regard.

regards,
Mehool.

I am not a very big fan of MA and I do not use the MA the way you use them but I use them in my methodology and I use it more of a Support And resistance and to determine where if the market price is bullish or bearish. the MA will obviously be different for different time frame as the period of time is different .You will catch much more cross overs and momentum change of the market in shorter time frame the longer ones and the entry and exit should also be quick accordingly ! moving average cannot give you the same standard value on multiple time frame this is because of the difference in time frame. if you trading the MA do it with confluence of higher time frame ! your 3rd point is irrelevant and makes no sense . No one can tell you which will be better you will have to find out that on your own what suits you better! The example that you have given that 5 MA crossing the 10 MA how would you close your trade on the basis of this ! if 5 ma crosses 10 ma from below it means that you have change in momentum north a bullish crossover and if it crosses from below it indicates a southward momentum ! I hope I helped

Thanks Saif,

But your answer is not much of a help. The question was in reference to Automated EA where I have defined entry and initial stop loss. But for exits, I want it to be market driven and not fixed pips. Now if you relate this to my earlier question, it will make more sense to you.

This question was for anyone in this forum who uses MA's just for exits and not for entry. Hope I am clear.

Suggestions are needed.

Thanks again.
Mehool.

I have not seen your earlier automated EA post .....will do ! SG sir will be able to help you on exit ! but as a trader it has to be your own methodology to exit a trade maybe you should experiment and practice on exits live that will give you a basic idea on when you should move out.. where are you SG?

Hi Saif,

I already have identified a methodology which ultimately based on back testing, I will conclude on which are best optimum settings, but want to know from someone who does exits using MA's. Like a trailing stop MA or MA crossover.

SG Sir, Can you help here.

Regards,
Mehool.

Hi Mehool,

There are several types of Trailing one can follow....

Here is one that I personally like... which is as follows

On the day of Entry No S/L
T+1 TSL is 50 MA of T Close (T=Trade Day)
T+2 TSL is 49 MA Close Of T+1
Goes on till it reaches 10 MA of Previous Day and remains constant till it is Taken out.

SG

Thanks SG,

This is I guess for trading based on Daily Charts but what I am looking for is exits on 5 MIN, 15 Min, 30 Min & 1 HR. I am developing an EA where my entry and initial stop loss strategy is clear but for exits, I want to use trailing stop loss either using MA or using PSAR.

Again on PSAR, I am clear but in MA, I am not sure what should be MA values against these 4 time frames which will Trail the price action. I guess that will purely be based on backtesting which I will any ways do.

You have any other suggestions on exiting market in auto mode.

Thanks again for your quick response.

Regards,
Mehool.

Hi Mehool,

Give me till next week when I will be a bit free from some ongoing domestic events...requires a few posts and charts to illustrate...!!!

SG

Sure SG,

Will buzz you mid next week.

Thanks
Mehool.

Mehoolsheth, keep in mind that an MA is just that-- a moving average. It moves, and it is an average.
Let's use your 48MA on the hourly as an example. It measures the average of the last 48 hourly candles.
All MA's will move based on the average of the last x amount of candles, so yes, the 15m and 30m will also change in accordance with the average.

The tenken and kijun in the ichimoku are often mistaken as MA's, but they are not. I do use the kijun for a trailing stop and do very well with it. It is one variation of a stop that I use, and it depends on what I want the trade to accomplish for me as to how I use a stop. This has all come from personal observation.
My point is you can use your MA's through personal observation to determine your stops and TP's. This way you can draw your own conclusions as to what is best with your personal style.