%% Good points. Actually that does not fail in a bear market\pro downtrend/it just takes longer to profit=big difference,.....................................................................................................
From reading your comment, you are saying MA suck in longer term stock market movements since if for example you were to go long on a cross upward, you would do worse than a buy and hold strategy. And, no one is going to disagree with this statement since yes, due to lag and other reasons including back testing, this simplistic strategy does not work especially since its the easiest to see on a chart for newbies. However, that is not how PA traders in shorter time frames use MA. No we don't take them as signals to go long or short. What they are useful is determining trend or bias. If say stock prices are above the 200 day moving average then we are still in a bull market. So you might want to look for bullish trade setups that have an edge. An edge is the actual setup that when both back tested and forward tested with real money has a profitable outcome above 55% of the time. Once you find an edge, you then need to implement a system that includes risk vs reward for each trade, total loss you are willing to take for the day, and finally the ability to take your trade setups correctly on the far right side of the screen, and have the patience to wait for setups that you have back tested or use full automation if you are able.
I trade /NG (Natural Gas futures) exclusively and it religiously respects 50 and 200 EMA, especially on Daily chart.......
To formulate a trading strategy based on that chart alone, I would have to immediately get into special cases of "trend above upper band", "trend below lower band" and "bounce between bands". And then when I had coded that, I am pretty sure it would fail horribly out of sample. I guess you use it to guess where it may bounce intraday among other factors? "Religious respects" is giving it way too much credit though, even if the above isn't just a random fluke.
I just started using Amibroker to backtest and walkforward strategies. I had a strategy that, when optimized over 10 years, made $144,000. I then walked forward that same period with 6 month increments and it barely broke even.