Moving Average Crossover

Discussion in 'Strategy Development' started by clarodina, Jun 28, 2008.

  1. An article on tscc showing how tokais uses 2 moving averages crossover to trade. Wonder how to adapt the formula for closing above or below the moving average instead of using 2 moving averages.
  2. Use the median of the two MA's.

    Bar Close > Go Long
    Bar Close < Go Short
  3. Gary Fox

    Gary Fox

    Hello Clarodina,

    Was it intraday or end of day? Also, what length were the moving averages?



  4. Hi folks

    You comments about moving average crossovers got me thinking about my own approach.

    I think you can make it work if you understand the limitations of moving averages in general..

    A trader interested in using MA's needs to get intimate with the basics. You need to be able to answer the following questions

    1. What are the differences between the most commonly used MA's?

    2. How do you decide which length(s) of MA to use

    3. Are crossovers the best way to go, or could one do better by using slope or combining MAs with other filters?

    4. Do we understand the dynamic nature of MA's and how that benefits the trader intraday? (as opposed to a static intraday indicator like pivots for instance).

    I was reading a book by Ben Warwick ("Event Trading" when it occured to me that I needed to get into the subject in order to find an edge (to see if there WAS an edge to be found). The author thinks that moving averages do in fact offer a tradeable edge if approached correctly.

    I am constrainted somewhat in what I can say about my own system but I will say that I use longer MA's on several time frames and I do pay attention to crossovers but only in certain circumstances. Perhaps my comments and charts posted on the thread "Ideas for struggling traders" will help you...

    Best of luck

  5. Here is simple approach to trade MA's crossovers .
    1. Price Structure ( HH, HL) or( LH, LL) for trend direction
    2. Draw Channel To see better price boundaries
    3. In this sample 3/8 SMA's are used
    4. For entry trigger make a box Swing High- SMA(8)= SMA (8) - Low for sell and SMA (8)-Swing Low= SMA(8)+High for Buy
    5. Use channel lines as targets or if you don't like channels use MM's (Measured Moves )
    6. Use channel lines for filtering in this sample trade 1
    7.Use Entry trigger boundaries for Stop Loss:)
    8,9, 10 You have to consider Volume ,time of the day News hours
    for additional filters

    <img src= width=800>
  6. use MA crossovers for entry and nearest support and resistance for exits.

  7. Actually I never use Ma crossovers they lag by design:D
  8. You know I hear a lot of folks saying that they use MA and some saying they dont use MA since they lag.

    For the folks that use MA - 1min-5 min bars are extremely noisy. What kind of timeframes do you use?

    For the folks that dont use MA - What kind of a crossever system do you use (If any that is)? Also how do you then get rid of the "lag"?

  9. Techy


    Here I take EMA Crossovers analysis and signals
  10. Tums


    #10     Dec 23, 2008