EMAs for swing trading

jr07 · May 7, 2009

Hi

Ive been using a short (13) and a long (50) EMAs for trading a basket of stocks as of late.

If the short EMA is below the long one, and it turns upwards, I go long. I stay long until de short EMA crosses the long EMA and stay long as long as it is above.

Problem is, by the time the short EMA reverses and crosses again, price is almost already at my entry level, sometimes even below. So Im losing more than winning.

In addition to that, sometimes the short EMA threatens to go up but doesnt, time at which I exit inmediatly. I diligently cut losses short.

So Im cutting losses short, but theres too many of them.

Being EMAs lagging indicators of course they arent much help, but as a simple strategy I thought they would work. Seems they dont, or am I missing something?

J

hoodooman · May 7, 2009

No. They don't work like that.

GCSICLRBC · May 7, 2009

Quote from jr07:

Hi

Ive been using a short (13) and a long (50) EMAs for trading a basket of stocks as of late.

If the short EMA is below the long one, and it turns upwards, I go long. I stay long until de short EMA crosses the long EMA and stay long as long as it is above.

Problem is, by the time the short EMA reverses and crosses again, price is almost already at my entry level, sometimes even below. So Im losing more than winning.

In addition to that, sometimes the short EMA threatens to go up but doesnt, time at which I exit inmediatly. I diligently cut losses short.

So Im cutting losses short, but theres too many of them.

Being EMAs lagging indicators of course they arent much help, but as a simple strategy I thought they would work. Seems they dont, or am I missing something?

J
More...

You may want to consider ditching your EMAs & other "indicators" & just trading support and resistance. It can be found with straight lines & is for the trader who wishes to be long near the bottom & short near the top....not somewhere in the middle, with the hopes of "catching a trend."

GL!

Hook N. Sinker · May 8, 2009

Jr07, are you using daily price data?

Mr.Consistent · May 8, 2009

Quote from jr07:

Hi

Ive been using a short (13) and a long (50) EMAs for trading a basket of stocks as of late.

If the short EMA is below the long one, and it turns upwards, I go long. I stay long until de short EMA crosses the long EMA and stay long as long as it is above.

Problem is, by the time the short EMA reverses and crosses again, price is almost already at my entry level, sometimes even below. So Im losing more than winning.

In addition to that, sometimes the short EMA threatens to go up but doesnt, time at which I exit inmediatly. I diligently cut losses short.

So Im cutting losses short, but theres too many of them.

Being EMAs lagging indicators of course they arent much help, but as a simple strategy I thought they would work. Seems they dont, or am I missing something?

J
More...

I don't use moving averages, but if you do take a look at "GUPPY MULTIPLE MOVING AVERAGE", he is uses moving averages in a unique and useful way.

http://www.guppytraders.com/gup329.shtml

jr07 · May 8, 2009

Quote from Hook N. Sinker:

Jr07, are you using daily price data?
More...

Yes, I use daily candlesticks on a 6 month period.

J

Unhommefou · May 8, 2009

Quote from Mr.Consistent:

I don't use moving averages, but if you do take a look at "GUPPY MULTIPLE MOVING AVERAGE", he is uses moving averages in a unique and useful way.

http://www.guppytraders.com/gup329.shtml
More...

I have backtested and performed walk forward analysis on plenty of strategies that use multiple moving averages.

So far, the only systems that gave decent results with moving averages were either longer term strategies (using daily or weekly bars), Rainbow Multiple moving average system, or the Guppy MMA in which the rainbow system is based on anyway.