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Why exactly do EMA crossover systems not work?

  • #461
  • Jan 19, 2012 6:20pm Jan 19, 2012 6:20pm
Quoting Pipanator
The people on this thread who state the MA system is flawed and doesn't work I fail to understand what they are looking at as the charts confirm they DO work here is 3 entries on the euro/usd today on 5 min used with price action why do so many people object to this method like its evil and should not even be read an ounce.
I did a backtest with all posible ma cross combinations and non of them were profitable in the long run, additional discretionary logic is needed to filter the wrong trades or analyze the entry/exit point.
  • #462
  • Jan 19, 2012 6:33pm Jan 19, 2012 6:33pm
Quoting Rikers
I did a backtest with all posible ma cross combinations and non of them were profitable in the long run, additional discretionary logic is needed to filter the wrong trades or analyze the entry/exit point.
Thats because people read em wrongand dont see them for what they are

Hello all whats happened here? Threads full of bad language, lots of ignorant people?

Not been in the forums for years but they're unrecognizable.
https://linktr.ee/Soultrader
  • #463
  • Jan 19, 2012 6:37pm Jan 19, 2012 6:37pm
How long did you backtest and was it manually done or through software?

Also, ema in my view dont help entry but do help shortly after entry to improve my confidence that the trade is heading in the right direction after the cross over or approaching. The crossover should not be taken as an entry signal price action should.
Find your Favourite Pattern
  • #464
  • Jan 19, 2012 6:45pm Jan 19, 2012 6:45pm
Quoting soultrader
Thats because people read em wrongand dont see them for what they are

Hello all whats happened here? Threads full of bad language, lots of ignorant people?

Not been in the forums for years but they're unrecognizable.
How about this logic:

anything that is know must be unprofitable by definition....
since forex is 90%+ speculation...
it is a mostly closed system...

so you can't run the same trading logic as majority of traders, it will eventually be the wrong one. It is natural that most of the traders that start out trade a variation of the MA cross.
  • #465
  • Jan 19, 2012 6:52pm Jan 19, 2012 6:52pm
Quoting Pipanator
How long did you backtest and was it manually done or through software?

Also, ema in my view dont help entry but do help shortly after entry to improve my confidence that the trade is heading in the right direction after the cross over or approaching. The crossover should not be taken as an entry signal price action should.
2005-2010, M5 period, programed - entry on crossover, exit on opposite crossover. It took me 5 independent filtering setups to move it from negative to positive and at that point all of the crossovers were unnecessary so I dropped it completely...
  • #466
  • Jan 20, 2012 11:39am Jan 20, 2012 11:39am
well regardless of backtesting I can see it works in some way along with price action which is good. Also, a large portion of amatuers use it so it increases the probabilty of our trades working out using this than not using it.
Find your Favourite Pattern
  • #467
  • Jan 20, 2012 7:03pm Jan 20, 2012 7:03pm
Quoting Pipanator
The people on this thread who state the MA system is flawed and doesn't work I fail to understand what they are looking at as the charts confirm they DO work here is 3 entries on the euro/usd today on 5 min used with price action why do so many people object to this method like its evil and should not even be read an ounce.
We can all good examples for any method which proves it works you need to be objective and look at all the failed trades, if the failed trades cost you more than the profitable trades then it doesn't work.

It doesn't work, on it's own add in some human discresion and some people might push it into being profitable.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #468
  • Jan 20, 2012 8:06pm Jan 20, 2012 8:06pm
as a long time student of MA and studied MA under a master who has been using it for 30+ years...

All I will say is that MA are only good for 1 thing. They tell you the trend. In fact it is probably the most reliable indicator to tell you of the trend. Simple and elegant. If your MA is crossing over to bull side, your bias is long. If your MA crosses to the bear side, your bias is short.

That is all the MA cross is good for.

Entries should still rely on support resistance. Blindly following every MA cross signal will put you in a lot of whipsaw and if your money management is not good, you will lose money.
  • #469
  • Jan 20, 2012 8:26pm Jan 20, 2012 8:26pm
Quoting thelws
as a long time student of MA and studied MA under a master who has been using it for 30+ years...

All I will say is that MA are only good for 1 thing. They tell you the trend. In fact it is probably the most reliable indicator to tell you of the trend. Simple and elegant. If your MA is crossing over to bull side, your bias is long. If your MA crosses to the bear side, your bias is short.

That is all the MA cross is good for.

Entries should still rely on support resistance. Blindly following every MA cross signal...
Right on.
  • #470
  • Jan 20, 2012 10:34pm Jan 20, 2012 10:34pm
  •  regme
  • | Joined Mar 2010 | Status: Planning to be like Warren Buffett | 115 Posts
I think MA crosses are good for medium and long term trading, not for scalping. I use standard SMAs.
Some cares b4 using MA Crosses.

1- Don't trade MA Cross, when crossing is because of Big Candle. I expect price retracement.
2- Don't trade MA Cross when Market is just open.
3- Don't trade MA Cross during Major news.
4- No S/R at or near point of crossing, in trading direction.

Above are my two cents.
  • #471
  • Jan 21, 2012 12:06am Jan 21, 2012 12:06am
Just my .2 cents but a fast cross over a very slow is boring but do work on d1 good for catching a longer trend. Like watching grass grow until you get a signal.
  • #472
  • Jan 21, 2012 12:27am Jan 21, 2012 12:27am
Quoting regme
I think MA crosses are good for medium and long term trading, not for scalping. I use standard SMAs.
Some cares b4 using MA Crosses.

1- Don't trade MA Cross, when crossing is because of Big Candle. I expect price retracement.
2- Don't trade MA Cross when Market is just open.
3- Don't trade MA Cross during Major news.
4- No S/R at or near point of crossing, in trading direction.

Above are my two cents.
All my trades start with scalping like entries. I use mas but along with other tools. It's been working beautifully so far.
  • #473
  • Jan 21, 2012 12:43am Jan 21, 2012 12:43am
Most important thing is none of any currency / stocks cant move very far near from MA., if we did wrong trade then just wait market return to that MA to close in small loss, now what is MA ? 14, 55, 150, 365 ???

I use 89 in 4h also it works in 1 min too, market is always conflict remember support become resistance so play around MA.
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  • #474
  • Jan 21, 2012 12:48am Jan 21, 2012 12:48am
my own ea trade with ema open and lwma close and rsi as filter (filtering 45-55 range areas) and shifting bars on daily tf. plus a nearly perfect money management

the important values, please take a closer look:
- percentage of trades won 94%
- consecutive wins 16 losses 1
- my maximal personal drawdown is regardles of manual or automated trading is 30%
- if i rarely backtest, then only with 99% dukascopy tick quality (these attached backtests are made for this thread from 1/1/2008 - 4/28/2011 financial crisis till fukushima - most volatile times)
Attached Image(s) (click to enlarge)
Click to Enlarge Name: ma-high-risk.jpg Size: 133 KB
Click to Enlarge Name: ma-medium-risk.jpg Size: 129 KB
  • #475
  • Jan 21, 2012 2:24am Jan 21, 2012 2:24am
Quoting ixbone
my own ea trade with ema open and lwma close and rsi as filter (filtering 45-55 range areas) and shifting bars on daily tf. plus a nearly perfect money management

the important values, please take a closer look:
- percentage of trades won 94%
- consecutive wins 16 losses 1
- my maximal personal drawdown is regardles of manual or automated trading is 30%
- if i rarely backtest, then only with 99% dukascopy tick quality (these attached backtests are made for this thread from 1/1/2008 - 4/28/2011 financial crisis till fukushima - most volatile...
this looks a lot like martingale.
If it really is, then I wish you the best of luck. Better you go to the casino, at least there are some flashy lights, when you lose all your money.
  • #476
  • Jan 21, 2012 4:41am Jan 21, 2012 4:41am
its not a martingale that you know, it hedges positions, if the entry order goes wrong, therefor this is not martingale by definition and yes pure martingale is dangerous, fireworks too, for people how are not familiar - money management is the key for all "systems" in forex
  • #477
  • Jan 21, 2012 4:50am Jan 21, 2012 4:50am
Quoting ixbone
its not a martingale that you know, it hedges positions, if the entry order goes wrong, therefor this is not martingale by definition
13% DD is not good for equity,
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  • #478
  • Jan 21, 2012 4:53am Jan 21, 2012 4:53am
13% is less enough for the time range 1/1/2008-4/24/2011 financial crisis till fukushima - the highest volatility period over longer time range
  • #479
  • Jan 21, 2012 9:06am Jan 21, 2012 9:06am
Quoting thelws
as a long time student of MA and studied MA under a master who has been using it for 30+ years...

All I will say is that MA are only good for 1 thing. They tell you the trend. In fact it is probably the most reliable indicator to tell you of the trend. Simple and elegant. If your MA is crossing over to bull side, your bias is long. If your MA crosses to the bear side, your bias is short.

That is all the MA cross is good for.

Entries should still rely on support resistance. Blindly following every MA cross signal...
In addition to all of the above I use a couple of other indicators (MACD, RSI) to determine whether or not a trader will be profitable or not.
  • #480
  • Jan 21, 2012 9:11am Jan 21, 2012 9:11am
Quoting ixbone
money management is the key for all "systems" in forex
that statement is so wrong. But believe what you want.
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