anybody tried this?

Discussion in 'Strategy Building' started by manz66, May 6, 2003.

  1. manz66


    Scot Lowry wrote a book - 'The Magic of Moving Average ', his approach to trading is finding good entry points, with the least amount of risk - so - his system is this.

    1. Plot 3 simple moving averages - a 4 , a 18 and a 40

    2. When the 18 crosses over the 40 line, you start watching for a buying point.

    3. The buying point is -- when the price of the stock comes down to the 18 line - and closes under it - you place a stopbuy just above the 18 line - this will get you into the stock when it reverses and moves above the 18 line . After that , you maintain a stoploss at a price that is halfway between the 18 line and 40 line.

    4. His sell signal is similar.

  2. Hi,

    Interesting entry stratgey but theres two questions in my mind:-

    (a) How does he exit the position once hes in?

    (b) What does he do with his 4 period M.A. ?

  3. hwaxen


    The problem with this is that those three simple moving averages may not be best for each "vehicle." Three other averages may work best for IBM, three others for QQQ. I would take the idea of what he says and try and refine it to what you trade.
  4. Flynn


    If I'm not wrong Chuck LeBau has described very similar tactic called Sword-Fish.
    P.S. Not sure about exact names.
  5. Well said, I use different MACD settings for index futures and individual stocks(when I trade them at all) someone else on ET says "make it look pretty"