SMA opposite

Dear Trader, im opening new thread (if a similar thread is opened yet please inform me i will delete)

I m working on a moving average strategy

The strategy does the exact opposite what most trader usually do when they trade moving average

So i use a 200 ma and as soon as a candle closes above moving average i open a sell order and v.v. and i close if price touches moving average again from above

The problem is it wont work in trending periods,

as im about to find an solution to let it automate to an EA i would like to find people for some suggestions to improve the strategy


I recognized it works on all timeframes im ranging markets

Sooo if you wanna join this discussion and create maybe a profitable system together you are very welcome

Strategy:
200 MA
Entry point:
-if candle closes above we open sell
-if candle closes below we open buy

We do this for a maximum amoumt of candles mot only for the first! The further away the candle from the moving average the more higher the probability to win the trade

We do it till price touches moving average again

So exit: price touches moving average again



I recognized as i said it works on all timeframes in ranging markets but you never now when the trend beginns, and you lose on your order

I also found it usefull to use a RSI (70/30/14) and if its overbought or oversold / above or below moving average i only buy then shor or long


Any idea is welcome cheers

For example on this picture, if we would have bought on candleclosing price, orders, below moving average "buy" order and above moving average "sell" order we would have won all trades in rangin markets

But the trend can be negative if you buy or sell tp early

I would like to face this problem together

Hi, thanks for sharing your idea. I know simple is always best, but too simple or simplified will mean you don't have enough there for a profitable system as there will not be enough base framework there for conditions to trade. Just buying or selling every bar and hoping it will go the other way because some traders do the opposite is very risky. You have a good starting point with your observations. However, you have not backtested or done any calculations/tests in simulator. Trading the M1 like this is a fast way to blow your account if you have failed to identify a small temporary range, as asked by the post above mine.
The actual strategy you are trying to build here is a "mean-reversion" strategy from my understanding. Where it is assumed price has to return to the mean, in your case the 200 sma. I would suggest you check out a thread by another member here on FF, by searching for mean reversion strategy as it has some nice details and explanations.
Please take the information here as positive as I commend you for sharing your observations and ideas. Work hard and I am sure you can get a few extra ideas to add to your strategy from the mean-reversion posts to further develop into your own system/ strategy/ EA. I have taken my time to try and help you, so if you take my advice/ comments or not is entirely up to you. Keep up the hard work
Kind Regards,
Tzamo

How to do the opposite of what most traders usually do (very little to do with strategy):

1. Don't use high leverage
2. Don't enter a trade unless you have a trade plan
3. Always stick to your plan
4. Don't over trade
5. Don't revenge trade

Feel free to add to this list : )

Yes exactly! It should work on all timeframes... not only 1 minute

Thank you for your informative informations. I will chek out. Yes i work on it.

A 200 moving average will hit once back in short timeframes, as i said im trying to optimize it

I try to use stabdardaviation too ti recognize if price is far away from MA and try to find orders to entry.

I would be happy to finish a system that is profitable


Wish you all the best

The biggest problem (I think with no solution), you can't know, how long will stay a market in trend or in range. I tried to make an EA, which was based on Wilders ADX and BB Band. If the price touched the band until the adx was belowe 20 I entred opposite.
The problem is, the ranging market can be really volatile, you need a big stoploss to reduce loosing trades, the reward is often poorly, because the small/decreasing range. If you put your trade in breakeven after time the price comes often back, because the slowly up/down move in the range. One thing is almost always true, the last trade will be looser. for example you have 2/3 winning trades in the range, when the market break out, will take back a lot from your profit. I tried to solve the problem, with an opposite trade in the market direction, if it breaks with some lote increasing, but the fail breakouts, make it looser. Keep these in mind, when you develope you strategy.

The problem is to want trade with only focus the indicators. So this will fast get tuned with other indicators who want to filter out bad trades.
If you get how the market work and you have read the disclaimer from your broker several times, you getting an idea that the use of any indicators are only wasting time and money. I know i get for this post several mad feedback, but i am not only few days trading and have test so many things and methods.

Price action (have a deeper look that a line chart can do for you? A candle chart is too much information you not need!) and a money management that suit your trading style is all you need.

Broker tell you that in worst case you lose your money and only risking money you can effort. Broker dream you use a chart full with garbage so broker get all your money and is happy you fill the account over and over again.

Greets Michael

I know what you mean. Thx for your answer. I had the same problem once.

I will try to find another way. Keep you informed if i get something

I think you just need a most overbought condition to recognize!

And yeah sometimes its this big and sometimes that big ...