A Moving Average Trading System

Traderji · #**151** 26th November 2006, 11:37 AM

Quote:

Originally Posted by jatayoo

dear tradersedge
The system is reasonably good,using moving averages:but their are simple,weighted,and exponential moving averages.
If you have traded with this system then could pl tell us your views as to which of the averages i.e simple,weighted,or exponential is most desirable?
I may also add that this system can be used alongwith candlestick charting patterns for effectiveness.

Generally if the type of moving average is not mentioned it is understood to be simple moving average!

rahulg77 · #**152** 2nd January 2007, 10:27 PM

dear Traderji,

Is there a exploration formulae we can use in MS which can tell us about a 3-39 and a 3-13 crossover to the upside if we want to trade long.

Rgds

Rahul

pgd · #**153** 3rd January 2007, 08:18 AM

Rahul,

I don't know MS syntax but the logic of crossovers on the daily chart is simple and is achieved when the following 2 conditions are satisfied:

For 3-13 upward crossover:

sma3(of today) > sma13(of today)
AND
sma3(of yesterday) < sma13(of yesterday)

For 3-39 upward crossover:

sma3(of today) > sma39(of today)
AND
sma3(of yesterday) < sma39(of yesterday)

If you can render this in MS formula format, u've got it.

For any other time frame the same will apply with suitable alterations:

today becomes current period
yesterday becomes previous period

Hope this helps.

Now, you're armed to the teeth.

Cheers.

rahulg77 · #**154** 3rd January 2007, 04:31 PM

thanks,

I know the basic too but not able to put it into Metastock format.

Rgds

Rahul

pgd · #**155** 3rd January 2007, 11:03 PM

Oops, Rahul!

Sorry for carrying coal to New Castle.

rahulg77 · #**156** 4th January 2007, 03:18 PM

Quote:

Originally Posted by pgd

Oops, Rahul!

Sorry for carrying coal to New Castle.

HI pgd

atleast the intentions were good.

Rgds

Rahul

kkseal · #**157** 4th January 2007, 04:27 PM

I think a MA crossover system in conjunction with leading indicators is one of the best we have (though not perfect). As for the periods it can be different but must have a short, medium & longer term component.

I use the following EMA pairs : 5d(CLOSE)/6d(OPEN), 12d/20d and also a 50d SMA/EMA pair.

Alongwith EMAs leading indicators (specially RSI) is a must for me. Bollinger bands are great. Candlesticks & Patterns also help.

Mechanical systems are good for an initial scan/filtering but i feel one should never buy/sell a stk without a manual inspection of the charts. Such inspection can reveal things that an automated scan cannot. (Like if my MA system scan reveals 6 stocks all giving buy signals I will be more inclined to pick the ones breaking out of a consolidation pattern or showing a nice candlestick pattern). In fact i feel the biggest ingredient to trading success is an eagle eye. (Money mgmt is fine but if trading is a business then risk mgmt ought to be like any other business. Can you have a Stop Loss in other businesses? It's how you read your chances of success before venturing in that ultimately determines the fate of your investments. And since this is so important I don't rely on any single indicator &/or method for it).

I believe MAs can be made smarter; can be made to tell more about themselves. Like predicting a crossover or the chances of success of a crossover. (It's like the pair telling you 'We're crossing over soon' or 'Ok we're crossing over but mind you this one may not last long'). Currently working on this.

Regards,
Kalyan.

uasish · #**158** 4th January 2007, 04:57 PM

kkseal,
Good study,you can use := Mov(c,3,e)- mov(c,8,e) ;see the 3rd attempts.
Asish

rahulg77 · #**159** 4th January 2007, 06:36 PM

Quote:

Originally Posted by kkseal

I use the following EMA pairs : 5d(CLOSE)/6d(OPEN), 12d/20d and also a 50d SMA/EMA pair.

Regards,
Kalyan.

Hi Kalyan,

what do u mean by EMA pairs. do u lot two MAs for each category. like u plot a 5dclose and 6d open both or take a average of the two and plot it as one line and what is the rational behind this.

Rahul

asnavale · #**160** 4th January 2007, 07:42 PM

Hi Rahul,

What Kalyan means is plot the pair of EMAs and see where they cross each other. For example, Plot 5-day EMA of Close and 6-day EMA of Open in the same chart. When the shorter period EMA (5d EMA of Close) crosses from below the longer period EMA (6d EMA of Open) and goes above, it is a BUY signal. Similarly When the shorter period EMA crosses from above and goes below the longer period EMA it is a SELL signal. The same principle holds for any other pair.

Regards

-Anant

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