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Why exactly do EMA crossover systems not work?

  • #341
  • Jul 25, 2011 3:18pm Jul 25, 2011 3:18pm
and so it begins
Congratulations ScalaFX for coming out of the closet!
  • #342
  • Jul 25, 2011 3:18pm Jul 25, 2011 3:18pm
Quoting nubcake
and now you understand why i'm personally not interested in trading slow timeframes scratching out low profits with questionable systems / methods. i can think of nothing worse than finding-out in 1 year, 5 years, 10 years time that all of the slow gains was an anomoly, and then have to start all over again from square 1. the idea is to make money... generally lots of money. not only do you have to find a way to carve profits from trading you also have to fork-over large chunks of the earned money to the friggin tax man (something most people...
yep, I know where you are coming from. I just find it really difficult to achieve CONSISTENT really high returns. I personally have settled for an average of 50 to 100% a year and that is enough for me (some would even consider this pretty high). Yeah, tax is another problem, but that is something you can't avoid, except if you are going to a tax haven.
And concerning if methods are questionable or not. I would say the more trades I can see, the less questionable a method is. Obviously it also needs to make sense. Trading with the moon cycle or some other stuff obviously doesn't make sense and would not be used in my trading.

Anyways, bed time. See you guys next time.
  • #343
  • Edited 3:29pm Jul 25, 2011 3:19pm | Edited 3:29pm
Quoting Troikaone1
lol......My system works fine.......no need for all of that.......as the young folks say......."you do you". My biggest problem is trading in larger lot sizes.....my goal is to trade very large like the big boys. My 1 mini lot days are long behind me.......I trade 3 to 4 mini lots at a time. I would like to trade standard lots with the same efficiency as I trade mini lots. My system is ready....but I am not ready.
This is the hardest part of trading.

Someone asked on another forum, doesn't the maxim, "scared money doesn't make money" fly in the face of "if you're not worried, you're not risking enough."

In the beginning, not letting fear interfere with trading metrics is crucial, but later, not letting safety interfere with success is everything. It took me a long time to get up to 10 lots. I nearly pissed my pants the first time I pushed the button. (I closed the trade 2 pips in the green....LOL)

But it is natural. The thing is, pushing up is never a comfortable space. If it was, then everyone would be there.
  • #344
  • Jul 25, 2011 3:25pm Jul 25, 2011 3:25pm
Quoting Custos
yep, I know where you are coming from. I just find it really difficult to achieve CONSISTENT really high returns. I personally have settled for an average of 50 to 100% a year and that is enough for me (some would even consider this pretty high). Yeah, tax is another problem, but that is something you can't avoid, except if you are going to a tax haven.
And concerning if methods are questionable or not. I would say the more trades I can see, the less questionable a method is. Obviously it also needs to make sense. Trading with the moon cycle or...
i wonder if you consider aspects of your trading to be questionable, but are content in it enough that you are happy to assume that at some point, somewhere, sometime, someone will put an explanation behind it and confirm its legitimacy. but in the meantime it appears to be a safe inclusion.

then again, at some point everyone has to rest on their beliefs to then put a step forward. moot question i guess.
Congratulations ScalaFX for coming out of the closet!
  • #345
  • Jul 25, 2011 3:28pm Jul 25, 2011 3:28pm
Nub's it began when you turned into a low life POS, so if your going to start questioning others you better take a long good hard look at yourself first.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #346
  • Jul 25, 2011 3:30pm Jul 25, 2011 3:30pm
la la la la la. i wish thegreatmilenko was around to say for everyone what needs to be said.
Congratulations ScalaFX for coming out of the closet!
  • #347
  • Jul 25, 2011 3:33pm Jul 25, 2011 3:33pm
Yeah cause 2 POS's cancel each other out.

Seriously people don't take anything Nub's says seriously, infact do the exact opposite of it.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #348
  • Jul 25, 2011 3:37pm Jul 25, 2011 3:37pm
Quoting Custos
I personally have settled for an average of 50 to 100% a year and that is enough for me
50 to 100% a year? Are you sure this is not a typo Custos?

Wow, even the top traders in the world cannot consistently double their money every year or else in 20 years they would have $2,196,431,025,250 in the bank, starting with only $5,000.

That means that at some point you won't find any Forex broker (or even a central bank!) in the world rich enough to take the other side of your trade
  • #349
  • Jul 25, 2011 3:41pm Jul 25, 2011 3:41pm
Quoting Mr Breakout
50 to 100% a year? Are you sure this is not a typo Custos?

Wow, even the top traders in the world cannot consistently double their money every year or else in 20 years they would have $2,196,431,025,250 in the bank, starting with only $5,000.

That means that at some point you won't find any Forex broker (or even a central bank!) in the world rich enough to take the other side of your trade

You can double a small account easily but as the $ amount increases it gets harder and harder to do, so 1K into 2K no issues, 1Mil into 2Mil, you'd have to risk 1Mil like it's 1K, so very very hard to do unless your completely fear / greed less.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #350
  • Jul 25, 2011 3:42pm Jul 25, 2011 3:42pm
Quoting Lucky Duke
This is the hardest part of trading.

Someone asked on another forum, doesn't the maxim, "scared money doesn't make money" fly in the face of "if you're not worried, you're not risking enough."

In the beginning, not letting fear interfere with trading metrics is crucial, but later, not letting safety interfere with success is everything. It took me a long time to get up to 10 lots. I nearly pissed my pants the first time I pushed the button. (I closed the trade 2 pips in the green....LOL)

But it is natural. The thing is, pushing up...
Yes it is very difficult because of all of the historical baggage that I have to deal with. Even though I have a high winning percentage, I still have that small voice in my head that reminds of a negative set up from 4 years ago and dares me to go large!! It is a work in progress. If someone were to look at my trading system they would say "My goodness....why aren't you trading with 20 mini lots?!!!!" When you build something from the ground up, it is a challenge to grow your confidence. If I had the advantage of a mentor, I would definitely be more courageous because I could lean on their confidence....but I only have myself as a mentor. But I have grown substantially as a trader over the years and my learning curve is flatter than ever.
  • #351
  • Jul 25, 2011 4:15pm Jul 25, 2011 4:15pm
You can not simply put several EMA's on the raw data and expect them work wonders.
I think I have found a way for moving averages to work (without loss of data) in any market.It is simple and only a concept at the moment but it is an exciting concept.

I have only understood maybe %5 of this book and it will take sometime for me to grasp it http://books.google.com/books/about/...d=e-TbA-dSrzYC but it is well worth studying the subject.

Has anyone investigated data compression alghorithms? http://en.wikipedia.org/wiki/Data_co...ion_algorithms
  • #352
  • Jul 25, 2011 4:28pm Jul 25, 2011 4:28pm
Quoting purley
You can not simply put several EMA's on the raw data and expect them work wonders.
I think I have found a way for moving averages to work (without loss of data) in any market.It is simple and only a concept at the moment but it is an exciting concept.

I have only understood maybe %5 of this book and it will take sometime for me to grasp it http://books.google.com/books/about/...d=e-TbA-dSrzYC but it is well worth studying the subject.

Has anyone investigated data compression alghorithms? http://en.wikipedia.org/wiki/Data_co...ion_algorithms...
ah parrondo. always a fascinating topic.
Congratulations ScalaFX for coming out of the closet!
  • #353
  • Jul 25, 2011 5:26pm Jul 25, 2011 5:26pm
ROLF! Obviously, some posters here do not know that the little story playing out in your head is not reality and only you hear the voices -- LOL! Let me change my classifications from my last post: there are people here who get it (intellegent and profitable); there are people here who are working at getting it (intellegent and but not yet profitable); and there are people here don't get it, complain that they can't get it, and have little chance of ever getting it (unintellegent and unprofitable). The typical MO of the worse members of the latter is to complain, ridicule, disparage, and demean, but when challenged, have no substance to back their claims and instead try to play the victim and look for sympathy. What a complete waste of time and space, even for the internet. It would be best to stop engaging these people and just pass them by. Their only (in one case in this thread a self admitted) purpose is to make jokes out of your issues. They are to be avoided if you are trying to trade or learning to trade, because they have no success to share nor do they have any experiences worthy of mention. In the past I have referred to them as "the turd in the punchbowl" because that best describes the level of contribution they actually provide. After hitting enter, I plan on adding one such individual to my ignore list. Would strongly suggest everyone do the same. Good trading (at least to those in the first two groups).
  • #354
  • Jul 25, 2011 5:35pm Jul 25, 2011 5:35pm
always the voice of the people... everywhere... despite never being asked to be by anyone at anytime, ever.

keep up the good work. the internet appreciates it.

i don't know why you won't just admit that you feel the need to comment anywhere i go and insinuate your elitism. just let it out. you will feel better, i'm sure! you really aren't that subtle so i'm sure others can see you riding coat-tails. meh. you are amusing at least.

maybe, just maybe, once in awhile you might decide to actually add something to the discussion and / or thread topic instead of your typical complaining and whining about this or that and asking everyone to do as you want? unlikely. funny how forums have people talking about different things. despite this you hardly add to any discussion you just moan. you really should open your own forum so you can moderate it exactly how you want it. just an idea for you to ponder.
Congratulations ScalaFX for coming out of the closet!
  • #355
  • Edited 6:39pm Jul 25, 2011 6:28pm | Edited 6:39pm
Quoting Turveyd
You can double a small account easily.
Sure, you can even double or triple your Forex account in 24 hours or less, no doubt about that. Currencies routinely move 1% on average each day. So for example if you buy EUR/USD and the price moves just 1% in your favor (with a 100:1 leverage) you just doubled your account right there. With a 400:1 leverage your account quadruples overnight.

But a trader who thinks he can double his forex account every year for, let's say the next 20 years is day-dreaming big time!!

Now here are the hard cold facts : If you can consistently make just 3 to 5% a month in the Forex market (or in any market for that matter), while still keeping your drawdown under 25%, then you are already a super, super trader with a truly profitable system, trust me on this one Turveyd.
  • #356
  • Jul 25, 2011 8:47pm Jul 25, 2011 8:47pm
this thread has successfully degenerated into troll bait.

But I'll bite.

The logic of MA:
1)If there is a trend, MA crosses will capture it. (this is the basis of the edge)
2)Like ALL edges, it requires 2 other components or secret sauce to make you profitable - namely: money management and good trading psychology.

Without (2), no matter what you do or how you trade you will not be successful. I am willing to bet my life on this one.

MA crosses by itself is an edge. As long as trends exist, MA will capture it. This is the basis, the reason, the logic that MA crosses are viable. It is good for identifying the trend and that is all it is good for. Because it can reliably capture the trend with high accuracy you can use this as an edge because statistically, over a large sample of trades, you will come out right more often than wrong. This is an edge.

This explanation is the same as price action. Price action argues that if a certain pattern "x" happens, we can trust that "y" will happen because based on some observations and logic, tested over a large sample of trades, the outcome was proven right more times than wrong. This is an edge.

Whether this "edge" was back tested or forward tested is not so critical. Many people have done it for us and they come to a conclusion that over a large statistical sample, you will be right more than wrong. What is critical is the secret sauce. Money management and trading psychology.

Not to digress further, MA can provide an edge as long as trends continue to exist. The day trends cease to exist is the day MA no longer provides an edge. Now, if you want to argue that logic, tell me why you think MA crosses will not provide an edge. Back it up with facts and figures and not merely because you can't understand. I doubt anybody understands price action that well either.
  • #357
  • Jul 25, 2011 9:44pm Jul 25, 2011 9:44pm
Quoting thelws
this thread has successfully degenerated into troll bait.

But I'll bite.

The logic of MA:
1)If there is a trend, MA crosses will capture it. (this is the basis of the edge)
2)Like ALL edges, it requires 2 other components or secret sauce to make you profitable - namely: money management and good trading psychology.

Without (2), no matter what you do or how you trade you will not be successful. I am willing to bet my life on this one.

MA crosses by itself is an edge. As long as trends exist, MA will capture it. This is the basis, the...
Superb post, Thelws!

And yes, money management IS the key!

In fact it is ridiculously easy to turn ANY profitable trading system into a losing system just by changing the parameters of its money management strategy, especially the stop loss and the size of each position (per trade and at the portfolio level).
  • #358
  • Jul 25, 2011 10:21pm Jul 25, 2011 10:21pm
Can we presuppose that the original poster thought that SMA crossover systems work and was somehow wondering why EMA crossover systems didn't work? I looked at the first couple of pages and could not figure out why EMA crossover systems were specified rather than just MA crossover systems in general. Any thoughts?
  • #359
  • Jul 25, 2011 10:48pm Jul 25, 2011 10:48pm
Quoting Troikaone1
Can we presuppose that the original poster thought that SMA crossover systems work and was somehow wondering why EMA crossover systems didn't work? I looked at the first couple of pages and could not figure out why EMA crossover systems were specified rather than just MA crossover systems in general. Any thoughts?
Hi Troikaone1,

If you backtest a lot of trend-following trading systems you will not find any significant difference between a simple moving average system and an exponential moving average system, as they are both designed to capture one thing and one thing only, the trend.
  • #360
  • Jul 25, 2011 10:52pm Jul 25, 2011 10:52pm
Quoting Mr Breakout
Hi Troikaone1,

If you backtest a lot of trend-following trading systems you will not find any significant difference between a simple moving average system and an exponential moving average system, as they are both designed to capture one thing and one thing only, the trend.
It does one other thing - it expresses equality in a linear fashion, removing the noise.


[For anyone just starting this thread]**Believe it or not....there have been some very quality posts on how to get MA's to work in the last 24 hrs.....
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