My 1 hour system, but I need YOUR help!

Quoting imprator

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Thanks for posting your system Qwiktrader; it is very interesting.

Regarding your latest trade - the crossover hasn't actually occurred yet (at least not on my data feed). As I write this, assuming the present trend doesn't rapidly reverse, the MAs look as if they will probably touch 30 minutes or so after your entry - and a confirmed cross probably won't happen until 45 minutes or more after your trade.

Your exit and entry on this occasion seems to involve a degree of judgement in anticipating the crossover (as you intimated in your first post). Is this typical - i.e. how often (in approximate percentage terms) would you trade in anticipation of the crossover rather than waiting for the actual event?

I ask because if you regularly anticipate the crossover your actual results will vary from a back test based on crossover points. Would you say that anticipating the crossover improves results?

Thanks.

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Quoting taxgeek

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Part of the reason for the lack of response is that it's a moving average crossover system. There are lots of these around, and they all have the same problem. Whipsaw. They work, if the market is trending, and profits can be impressive. If it's ranging or in congestion then they can be murder, and the profits vanish much quicker. Moving averages are trend following indicators. However, when moving averages cross you do not have a trend. You have congestion. Same thing is true for indicators like MACD that depend on moving average crossovers. You have a trend when the averages move in parallel, with shorter averages accelerating away from longer ones. Therefore to keep from getting killed by whipsaws, you need to incorporate some kind of filter to keep them out. There goes the simplicity, but therein lies survival. A filter can be lots of things i.e. a particular angle on the 14 period average, a requirement that the slope of the long term average always be in the direction of the trade, or another indicator. Say put a 10 period 1 deviation Bollinger band around price, and watch for the averages to cross but only trade when the price actually closes above the Bollinger, or maybe require that the RSI cross 50. This establishes momentum and trend and makes success more likely. This isn't criticism. It's just an explanation of why there isn't a lot of action and discussion on this type of system. Most everybody has been there and done that. Good trading!

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Quoting Qwiktrader

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Taxgeek, I greatly appreciate your thoughts and you are right on in that when the currency is trading sideways you might take some hits. This is another reason why I will look at the RSI and what it does with the line I put in at the 50 mark. I will look into the bollinger band setup to see if that will help. Regardless, any way I can make this system more successful I want to hear it! Thanks for your thoughts guys!

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