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Why exactly do EMA crossover systems not work?

  • #301
  • Jul 25, 2011 4:13am Jul 25, 2011 4:13am
Been range trading so far this morning so MA cross traders are seeing lots of signals but no trades on the E/$ and GBP/$.

This thread is one of those "what works and what doesn't work" threads. Just to be consistent, TA and indicators do not work. Only traders who know how to use TA and indicators "work". I rely on about 10 "things" to trade, but there are hundreds of people here who can tell you why those "things" don't work. Well, I know how and when to use the "things" that I do to trade. That is the challenge for everyone here (to come up with something that will work for you).

As for MA crosses, it is important to know that (a statistically significant amount of time) most fx traders have already entered trades before the MA crosses occur. For me, a MA cross is something to take note of as my trade developes, and for some fx traders, the MA cross is a place where they start to think about adding positions to existing positions.

Good trading everyone!
  • #302
  • Jul 25, 2011 4:17am Jul 25, 2011 4:17am
nubcaek,

This is what my mentor told me, who by the way uses MA to make his millions.

He started like you, not believing in anything and taking the most complex methods you can imagine to trade. Everything from fundamentals to technicals to price action.

He told me he got tired of it after 10 years and gradually wanted to trade in a calmer and simpler method - eventually settling for the simplest and most brainless method which *tadah* so happens to be MA crosses. Up to now, he has traded for almost 34 years. I'm not even sure if you were born yet when he started trading.

So, to put it simply, a successful person is comfortable trading blindly. Maybe you will too.

And as for me, although i went under tutelage from a MA trader, I prefer using price action to trade. Not because price action is a proper edge, but because I prefer it. It is more precise and it fits my psychology better.

So... I can vouch that you do not need to know everything or understand fully of anything. You just need to know that it works with enough accuracy over a long period of time to come out +ve. And you can bet that one day I will eventually settle for a mechanical and brainless method even if it makes me less money. As I trade more, I realize that time really means a lot more to me than the money I make (or may make).
  • #303
  • Jul 25, 2011 4:21am Jul 25, 2011 4:21am
Quoting Custos
Anyways, my message was that you should be a little less confrontational until you definitely know that something doesn't work.

cheers
where's the fun in that? this joint isn't for learning anything, so it must be for the lulz, right?
Congratulations ScalaFX for coming out of the closet!
  • #304
  • Jul 25, 2011 4:32am Jul 25, 2011 4:32am
Quoting thelws
nubcaek,

This is what my mentor told me, who by the way uses MA to make his millions.

He started like you, not believing in anything and taking the most complex methods you can imagine to trade. Everything from fundamentals to technicals to price action.

He told me he got tired of it after 10 years and gradually wanted to trade in a calmer and simpler method - eventually settling for the simplest and most brainless method which *tadah* so happens to be MA crosses. Up to now, he has traded for almost 34 years. I'm not even sure if you...
I believe that most new traders cannot believe for one second that it possible to make money consistently simply with two lousy moving averages. No, they think that trading needs to be complicated to be profitable. They need to have 3,000 indicators on their charts to make an "informed" decision, not knowing that the most profitable and the most robust trading systems are in fact the simplest ones.

I personally trade with zero indicator, just simple and pure price action.
  • #305
  • Jul 25, 2011 5:08am Jul 25, 2011 5:08am
Quoting thelws
nubcaek,

This is what my mentor told me, who by the way uses MA to make his millions.

He started like you, not believing in anything and taking the most complex methods you can imagine to trade. Everything from fundamentals to technicals to price action.

He told me he got tired of it after 10 years and gradually wanted to trade in a calmer and simpler method - eventually settling for the simplest and most brainless method which *tadah* so happens to be MA crosses. Up to now, he has traded for almost 34 years. I'm not even sure if you were born...
nice post
  • #306
  • Jul 25, 2011 5:20am Jul 25, 2011 5:20am
Quoting thelws
nubcaek,

This is what my mentor told me, who by the way uses MA to make his millions.

He started like you, not believing in anything and taking the most complex methods you can imagine to trade. Everything from fundamentals to technicals to price action.

He told me he got tired of it after 10 years and gradually wanted to trade in a calmer and simpler method - eventually settling for the simplest and most brainless method which *tadah* so happens to be MA crosses. Up to now, he has traded for almost 34 years. I'm not even sure if you were born...
i would think that after 34 years a person would be able to trade a monkey fart profitably... of course you will then get a crowd of sheeple claiming monkey farts are the source of profits and "you don't need to understand why monkey farts are profitable, you just need FAAAAAAAIIIIITTTTTHHHHH!!!!!".
Congratulations ScalaFX for coming out of the closet!
  • #307
  • Jul 25, 2011 7:17am Jul 25, 2011 7:17am
Quoting thelws
nubcaek,

This is what my mentor told me, who by the way uses MA to make his millions.

He started like you, not believing in anything and taking the most complex methods you can imagine to trade. Everything from fundamentals to technicals to price action.

He told me he got tired of it after 10 years and gradually wanted to trade in a calmer and simpler method - eventually settling for the simplest and most brainless method which *tadah* so happens to be MA crosses. Up to now, he has traded for almost 34 years. I'm not even sure if you were born...
  • #308
  • Jul 25, 2011 9:08am Jul 25, 2011 9:08am
Trading crossovers blindly i humbly believe will not work, though ive never done such thing in all honesty so im probably talking crap, like most.

However, i do believe IFFF they where to be profitable trading crossovers then its not "precisely due" to the crossover itself, but to other elements incorporated to their own analysis, be it filters, conditions, experience, whatever it may be.

Everything works some of the time, nothing works all of the time, unless, non-curve-fitted parameters are implemented.
  • #309
  • Edited 10:21am Jul 25, 2011 10:10am | Edited 10:21am
Quoting Turveyd
HIGH and LOW has advantages, you'll need both gives a nice spread which self adapts to average pip value between high and lows.
Let me guess, you have a day job that has nothing to do with trading, right?

Quoting Sauron
The biggest problem of these systems is that you can spend years in drawdown during ranging periods
Then don't do that. Learn how to identify ranges. Switch to your system that makes money in a range when the market is ranging. Return to your trend system when the market is trending. That usually helps.

Quoting Mr Breakout
Sell when the RSI is above 70 and buy when the RSI is below 30.
No. You can do many useful things with a RSI, you even apply logarithmic math to it. [see below] But a RSI can stay overbought or oversold longer than many traders can remain solvent, so it's the worst way to use it.

Quoting nubcake
i would think that after 34 years a person would be able to trade a monkey fart profitably... of course you will then get a crowd of sheeple claiming monkey farts are the source of profits and "you don't need to understand why monkey farts are profitable, you just need FAAAAAAAIIIIITTTTTHHHHH!!!!!".
You talk a lot. This is the least productive thing an unprofitable trader can do. Go away and learn how to trade. Come back and share some insights when you do.

Quoting thelws
This is what my mentor told me, who by the way uses MA to make his millions.
He started like you, not believing in anything and taking the most complex methods you can imagine to trade. Everything from fundamentals to technicals to price action.

He told me he got tired of it after 10 years and gradually wanted to trade in a calmer and simpler method - eventually settling for the simplest and most brainless method which *tadah* so happens to be MA crosses. Up to now, he has traded for almost 34 years. I'm not even sure if you were born yet...
Many simple systems can make money. The best advice I received was, "Use a magic marker and give your trades room to breath. When you hit a 50% area, take some profit. If it keeps moving in the same direction take some more profit at 61%." If someone can't stay out of the chop or get in on a 500 point move and take some meat off of it, then they have no business putting their money in the market.
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  • #310
  • Edited 11:54am Jul 25, 2011 11:42am | Edited 11:54am
I wanted to add one thought.

I may sound rude, but I'm not. I come from a math (not "maths") background. I built algorithmic systems for my clients for many years. I started trading my own accounts live last November.

Maybe that doesn't qualify me to have an opinion because I don't have years of personal trading experience. But since November I've done quite well.
I studied the voracity of each system and forward tested everything. Backtesting is not conclusive for too many reasons to get into here.

It needs to work real time or not at all. I stepped my lots in pace with equity growth and never took undue risk. And, I never confused online community with my developmental process like a lot of chatter boxes here.

Are you making money?

That is the only question you need to go to bed with and wake up with each day. If not, shut up and fix it. If so, then learn how to multiply it.

But for god's sake stop posting here if you don't have a clue. It doesn't help anyone, least of all yourself.

I probably won't post again. There's not much point in it.
  • #311
  • Jul 25, 2011 12:18pm Jul 25, 2011 12:18pm
Quoting Lucky Duke
I wanted to add one thought.

I may sound rude, but I'm not. I come from a math (not "maths") background. I built algorithmic systems for my clients for many years. I started trading my own accounts live last November.

Maybe that doesn't qualify me to have an opinion because I don't have years of personal trading experience. But since November I've done quite well.
I studied the voracity of each system and forward tested everything. Backtesting is not conclusive for too many reasons to get into here.

It needs to work real time or not at...
Your two posts here are among the best I've read on FF. Well said. Glad to hear of your success (I guess we forward test our trading approach every day -- lol).
  • #312
  • Jul 25, 2011 1:02pm Jul 25, 2011 1:02pm
Yeah, his first post that included
Quote
Then don't do that. Learn how to identify ranges. Switch to your system that makes money in a range when the market is ranging. Return to your trend system when the market is trending. That usually helps.

sure does provide a lot of insight and brilliance! Give me a break. A ton of arrogance for one of the most blindingly stupid things to say as advice. "Learn to trade all markets profitably then!" basically. Gee, thanks.
  • #313
  • Jul 25, 2011 1:10pm Jul 25, 2011 1:10pm
Quoting smittens4212
Yeah, his first post that included

sure does provide a lot of insight and brilliance! Give me a break. A ton of arrogance for one of the most blindingly stupid things to say as advice. "Learn to trade all markets profitably then!" basically. Gee, thanks.
mate. no one is here to be your seeing eye dog. you want to get the step by step, then live it. no one is going to spell it out in microscopic detail because you feel entitled.

sorry. if you came to FF looking for a handout, you're sorely mistaken.
  • #314
  • Jul 25, 2011 1:21pm Jul 25, 2011 1:21pm
Hey, I have no problem with anything you said, it's all good there. And MAs are worthless to my trading, but I do enjoy reading the arguments pro and against. I just thought it was funny that (and I think you'd even agree) you didn't say particularly much that was insightful or original, and the next poster said it was one of the best posts he's ever read here.

Had I known that telling people to make more money and to learn to trade ranging AND trending markets is what is missing then I would be making A+ posts all day.

It's all good. Carry on
  • #315
  • Jul 25, 2011 1:32pm Jul 25, 2011 1:32pm
I mean it's a nice idea to just define when the market is ranging and when the market is trending and trade it as such, but it's such a ludicrously naive statement that anyone who makes it I can't take seriously.

If we could all just define when the market was ranging and when it was trending, trading would be insanely easy. If you knew that an uptrend was about to start and all you had to do was buy pullbacks, trading would be insanely easy. If you knew to short on the next new daily high of the week because the market was ranging, trading would be insanely easy.

Saying you need to trade the range and the trend correctly to be profitable is like saying you need to make more money than you lose to be profitable.
  • #316
  • Jul 25, 2011 1:34pm Jul 25, 2011 1:34pm
Quoting smittens4212
I mean it's a nice idea to just define when the market is ranging and when the market is trending and trade it as such, but it's such a ludicrously naive statement that anyone who makes it I can't take seriously.

If we could all just define when the market was ranging and when it was trending, trading would be insanely easy. If you knew that an uptrend was about to start and all you had to do was buy pullbacks, trading would be insanely easy. If you knew to short on the next new daily high of the week because the market was ranging, trading would...
haha, yeah, lots of truisms in this thread and this forum. Not a lot of enlightening/practical stuff.
  • #317
  • Jul 25, 2011 1:43pm Jul 25, 2011 1:43pm
Quoting smittens4212
Hey, I have no problem with anything you said, it's all good there. And MAs are worthless to my trading, but I do enjoy reading the arguments pro and against. I just thought it was funny that (and I think you'd even agree) you didn't say particularly much that was insightful or original, and the next poster said it was one of the best posts he's ever read here.

Had I known that telling people to make more money and to learn to trade ranging AND trending markets is what is missing then I would be making A+ posts all day.

It's all good. Carry...
Yes. it is that simple. what am I missing?

Identifying ranges comes down to understanding stasis.

the market seeks stasis. not volatility.

All you need to do is identify the areas that the market is most likely to linger because fear is the operative at the moment.

In a trending market where the players are all in, it's a different scenario. That dissipated in May 2010. (for anyone who noticed)

Now we have a completely different daily metric. Structured on lower liquidity and faster moves. So intraday and swing have changed completely.

Yes, I could tell you how and why, and what to do next, but isn't it your job as a trader to identify these patterns and be effective?

You may be able to become an A+ trader, that's up to you.

It's my job to make money, not explain it. If that rubs you the wrong way, what can I say.
  • #318
  • Jul 25, 2011 1:49pm Jul 25, 2011 1:49pm
Quoting Custos
haha, yeah, lots of truisms in this thread and this forum. Not a lot of enlightening/practical stuff.
read carefully what people say.

when I was on an airplane 10 years ago, there was a towelette package.

it said.

open.

use.

throw away.


no shit sherlock. do you expect them to shake it too when you're done whizzing?

some things have a bit more substance to them, it's just having the eye to catch it.
  • #319
  • Jul 25, 2011 1:57pm Jul 25, 2011 1:57pm
Quoting Lucky Duke
read carefully what people say.

when I was on an airplane 10 years ago, there was a towelette package.

it said.

open.

use.

throw away.


no shit sherlock. do you expect them to shake it too when you're done whizzing?

some things have a bit more substance to them, it's just having the eye to catch it.
yeah, I already know that here on this forum there are a lot of people who talk very cryptic. Either they wanna be some kind of guru or they have no idea what they talk about and just give general truths. Like politicians and diplomats.

You rarely see people giving a straight talk here, but normally if I see one, I can already sense that he really knows what he is talking about. Just like in any other profession.
  • #320
  • Jul 25, 2011 1:58pm Jul 25, 2011 1:58pm
the factory... a forum where genius people go to tell everyone not to post anymore. nothing is stopping the muppets from creating their own forum where they can hold hands and pat each other on the back all day, but of course then they'd have no one to try and impress anymore. gefx i vote that you start a forum since you are the champion of posturing and self-appointed elitism. you and lucky stooge can keep each other company all day long.
Congratulations ScalaFX for coming out of the closet!
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