The problem with crossover systems

Discussion in 'Trading' started by 1a2b3cppp, Aug 10, 2018.

  1. SteveH

    SteveH

    Crossovers don't take into account where price is as of the last print.

    Reference price TO something.
     
    #21     Aug 12, 2018
    tomorton likes this.
  2. What you said.
     
    #22     Aug 12, 2018
  3. What does that mean... "duped"?

    (I can't start a PM with you, but you can with me if you choose.)
     
    #23     Aug 12, 2018
    777 likes this.
  4. The "problem" with crossover systems is they don't do what you want. That is, they don't "confirm a new trend so that it's safe to enter the water" on a trade. And they don't reduce or eliminate whipsaws.
     
    #24     Aug 12, 2018
  5. tomorton

    tomorton


    That's kind of correct, but also a bit unfair on this useful pattern. No crossovers indicate a trend is about to start. But how could they?

    But they are pretty good at confirming a trend might have started some time ago. Price isn't necessarily in a trend - rising prices don't automatically mean there is an uptrend. All trends have a MA crossover but not all crossovers indicate a trend has started. And none f them indicate a trend is going to start tomorrow.
     
    #25     Aug 12, 2018
  6. In the K.I.S.S. frame of trading..

    1. Crossovers dont' do what you want.

    2. Even when crossovers appear to be "good", they're lagging with price. If you're a sharp trader, you should have seen the trade before the cross.

    3. Some crossover params may actually accerate your losses. Trading on a daily average crossover is weak. Trading the MACD is weaker still.

    If you cared about my view... I'd say, "forget the notion of daily price, moving average crossovers". There is better to be traded. (Interestingly, my first exposure to TA was the "20 day MA crossover".)
     
    Last edited: Aug 12, 2018
    #26     Aug 12, 2018
    birdman likes this.
  7. tomorton

    tomorton


    1. Crossovers do what they do. Traders run into fatal losses when they try to make them do something they can't. Plus two other scenarios - one, if traders blindly enter on a cross: without some filter this is random trading; the other, is if traders buy on a cross and hold until there is an opposite cross.

    2. Yes, there is always a trade before the crossover. The crossover confirms a trend might have already developed: if you only want to trade maturing trends, that is not a problem.

    3. It works, its always worked, it will always work. It isn't perfect but the very poor reputation is down to very poor use, not very poor characteristics.
     
    #27     Aug 12, 2018
  8. Congrats. You've successfully argued against your own case. Good for you.
     
    #28     Aug 12, 2018
  9. Trend line / regression line is ‘quicker’ combined with historical intraday timepoints where orderflow is known to cause the largest historical price variance.
     
    #29     Aug 12, 2018
  10. Welcome back Handle123. I enjoy all your posts and comments.

    What happen to Xela?
     
    #30     Aug 12, 2018