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Do you believe moving average systems work?

  • #61
  • Jun 23, 2013 4:25am Jun 23, 2013 4:25am
Quoting shahroor
{quote} Thanks for your comment but why you think it should be left alone when you expect it to go higher ?
Hi shahroor, Pro traders stick to a method. They do not wake up one day feeling lucky and then trade.
I trade breakout on the 15 minute then hourly chart (sometimes) BUT I keep watch on the 4 hour chart and daily, as I do with pivots,/s/r, I look at charts far more than I should, but patterns/scenarios occur.
I do not trade off sunday range BUT your chart showed several sunday ranges with an outside bar following and every one got triggered long, maybe one didn't as it just continued.. and that is why I would expect it to keep going up. This would be against how I trade so I would not of traded it. Not every trade wins so this could of started something bad if I had of been reckless, be good
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #62
  • Jun 23, 2013 4:30am Jun 23, 2013 4:30am
Quoting Owl
{quote} Hey billy... is this the same nine yr old who told you that you was explaining elliot wave theory wrong also...?? she is quite remarkable I must say...
Hi Owl, she was 8 I believe when she corrected me about Elliot waves lol she is now 10 and got me seriously looking at ma cross overs, 12 months ago I would of advised to put any cross over method in the bin/trash but she is very selective and traded only the e/u, I trade cross overs now in a small way and only on e/j as I am still testing after 4/5 months. I am not quite as selective as her lol and use a different time scale. be good
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #63
  • Jun 23, 2013 4:41am Jun 23, 2013 4:41am
Quoting traider
{quote} A pure technician relies on price alone as price truly is KING. Any averaging system is a disaster in waiting.
Hello, what you say is true but you stated the old cliché (disaster in waiting) I believe some of your friends got smashed to pieces last year with the e/u by following Price Action ( I was pinged).
Like I say I believe entirely with your views but cross overs I am testing is very good after 4/5 months. I must say I only trade them at £1 pip and cannot say yet how high a value I could trade them, anyway be good and have a good week
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #64
  • Jun 23, 2013 6:46am Jun 23, 2013 6:46am
Quoting billytt
{quote} Hi shahroor, Pro traders stick to a method. They do not wake up one day feeling lucky and then trade. I trade breakout on the 15 minute then hourly chart (sometimes) BUT I keep watch on the 4 hour chart and daily, as I do with pivots,/s/r, I look at charts far more than I should, but patterns/scenarios occur. I do not trade off sunday range BUT your chart showed several sunday ranges with an outside bar following and every one got triggered long, maybe one didn't as it just continued.. and that is why I would expect it to keep going up....
appreciate this is your trading style and if it works for you then ofcourse no need to change
  • #65
  • Jun 23, 2013 6:58am Jun 23, 2013 6:58am
Quoting shahroor
The good thing about moving averages as pureprice kindly mentioned is direction which is an essential part of any strategy therefore moving average is a good base for any trading system however there are problems such as 1- delayed entries which we could live with 2- delayed exit which could wipe all our profits by the time the MA gives exit signal 3- choppy makrets can any one list any other problems you encountered
Over the years looking at charts I had to convince myself that when price go high , it can move even higher and higher and same when it moves down
I struggled with this concept for a while and then I decided to give it a try and see what happens , guys I couldn't have imagined the results , they were great , I was also lucky to pick a trending market but it opened my eyes to a new way of trading .

Overtime I started subconsciously drifting away from that concept back to the old habits and this affected me a great deal.
So in summary dealing with our entries in our MA system : we are going to buy high and sell low
gurus tell you only newbies do that and man they cant be more misleading , by the way we are talking strictly about leveraged Forex
we will put this into context once we address the other issues mentioned above
  • #66
  • Jun 23, 2013 11:10am Jun 23, 2013 11:10am
Quoting shahroor
{quote} Over the years looking at charts I had to convince myself that when price go high , it can move even higher and higher and same when it moves down I struggled with this concept for a while and then I decided to give it a try and see what happens , guys I couldn't have imagined the results , they were great , I was also lucky to pick a trending market but it opened my eyes to a new way of trading . Overtime I started subconsciously drifting away from that concept back to the old habits and this affected me a great deal. So in summary dealing...
hi bud, If that chart was the hour e/j and on the japan/uk/us open I would of traded it which ever way it went. I will not just join a trade. A lot of pros buy high and sell low with the same principle as what you say, I AGREE, but I stick to my method this is why it works.
I will be not on FF much for a few days as I am busy but I will look in, be good guys and have a good week
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #67
  • Edited 11:31am Jun 23, 2013 11:26am | Edited 11:31am
The 50, 100 and 200 Simple Moving Averages on the 4Hrs and daily timeframes are watched by many professional traders, analysts, bank and institutions.

Entering on pullbacks based on candlestick pattern analysis
(this is a very solid entry method which will typically have strict rules for entry and stoploss placement – extremely critical for success!)

Most important any moving average system – getting you into the market when it’s trending!
May the force with Arjun
  • #68
  • Jun 23, 2013 12:34pm Jun 23, 2013 12:34pm
Yes, I belive on Moving average. Moving average are one of the most popular and often-used technical indicator. The moving average is easy to calculate and, once plotted on a chart, is a powerful visual trend-spotting tool. You will often hear about three types of moving average: simple,exponential and linear. The best place to start is by understanding the most basic: the simple moving average. Let's take a look at this indicator and how it can help traders follow trends toward greater profits.
  • #69
  • Jun 23, 2013 12:41pm Jun 23, 2013 12:41pm
shahroor, in responding to your chart question, i would go short on next candle open with tight (10-15pip) stop
  • #70
  • Jun 23, 2013 2:41pm Jun 23, 2013 2:41pm
Quoting lmino 85
shahroor, in responding to your chart question, i would go short on next candle open with tight (10-15pip) stop
That is interesting , you are the first to go short, could you explain to us why would would prefer a short, Thanks
  • #71
  • Jun 23, 2013 2:44pm Jun 23, 2013 2:44pm
Quoting Lirbig Nubee
The 50, 100 and 200 Simple Moving Averages on the 4Hrs and daily timeframes are watched by many professional traders, analysts, bank and institutions. Entering on pullbacks based on candlestick pattern analysis (this is a very solid entry method which will typically have strict rules for entry and stoploss placement – extremely critical for success!) Most important any moving average system – getting you into the market when it’s trending!
That's helpful to know, thanks Lirbig
although I have to admit I am not a fan of candlestick analysis as I find it very unreliable but worth noting
  • #72
  • Jun 23, 2013 4:04pm Jun 23, 2013 4:04pm
Quoting shahroor
I do have my own view which I will discuss later however I would like to hear what others think about moving average systems , do you believe they have potential and why ? The aim of this is a constructive talk that would hopefully help someone
Who knows to trade MAs are absolutely enough...Indicators are just part of trading mind game.
The Market pays you to be disciplined
  • #73
  • Jun 23, 2013 10:42pm Jun 23, 2013 10:42pm
shahroor i trade harmonics and it looks like a pattern set up to go short
  • #74
  • Jun 24, 2013 2:49am Jun 24, 2013 2:49am
hi guys, I am not supposed to be here lol, trading the e/j since japan open has/is hard so far. Last night I had a lovely ema crossover trade, catch you later be good
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #75
  • Jun 24, 2013 4:02am Jun 24, 2013 4:02am
“THE” Guest (ForexFactory) :

Just stick to one trading system. Example: 20 SMA and 7 EMA cross over on the GBP/JPY hrly chart. Entry: cross-over; exit: crossover. A back-test for several months shows average 400 pips per month. Use about 10% of your account to trade; this gives about 50% increase of equity per month. Please let the loss be a loss; and let the win complete too. Don’t remove any trade unless the cross has happened. EVEn IF IT MEANS LOSING 50 PIPS ON ONE ROUND. There are 150, 170, 200, 230pip rounds on the way.

BlackFeet :

I wish I could communicate with THE GUEST ...

A FULL very kiss trade system (SetUp, Money Management, Trade Management, Psych..).. In less than SEVEN lines !

I'm quite impressed and thankful.


Vaya con Dios my friend
BigBlackfeet Always on the(forex) war path !
  • #76
  • Jun 24, 2013 4:53am Jun 24, 2013 4:53am
Quoting shahroor
I do have my own view which I will discuss later however I would like to hear what others think about moving average systems , do you believe they have potential and why ? The aim of this is a constructive talk that would hopefully help someone
Tech analysis has all attributes of religion.
The basic principles do not require evidences ;-)
So if you believe it works

Personally, i use 12 SMA on 5 min to feel pulse of 1h.
it's o'k to win ...
  • #77
  • Jun 24, 2013 5:22am Jun 24, 2013 5:22am
just read Steviet's Live Trades

50EMA vs 50SMA

Here the link http://www.forexfactory.com/showthre...47#post3835847

Hi Josh,

Not at all - in fact just had a pm from another member asking for clarification so I'll try and do that here.

Effectively I have 2 methods employed on the daily, the first of which is always in the market. The second, add-on method is employed from time to time as certain levels are tested.

Method 1 - always in the market

OK, so method 1 has 2 positions on at the opening price of the month. If the price is below both 50ema & sma then they are both short, vice versa if long.

No stop loss is employed, however if a daily bar closes the other side of the 50sma that position is closed at either profit or loss. A replacement position is immediately opened (in this case long).

If that daily bar also closes the other side of the 50ema that position is also closed at either profit or loss & replacement position opened.

It may be that for a few days I have one short & one long if we don't clear both sma & ema the same day.

If (as in May & probably June) neither close above the sma/ema for the whole month then positions are closed at month end for profit or loss and re-opened immediately, being the new month positions.

This is only a personal preference - I like to bank a profit or loss at the end of each month but there's no reason not to just keep the positions open until the sma or ema are pierced on a daily close.

Method 2 - Add-ons

At the end of each day I'll set 2 limit orders. One is 10 pips below (for short) the daily 50sma & one 10 pips below the 50ema. Each position employs a 50 pip stop loss initially.

Each day the orders are modified as the ma's change and it may be weeks until one or both are activated.

Now, say one or both are activated and it 'bounces' off the ma's that day then the position(s) are still on. Each day new limit orders are again set but also each day the stop losses on the active add-ons are reduced according to where the ma is at the end of each day.

This is what I mean by 'locking in profit' on these active positions. The add-ons are not closed at month end - they are only closed when the market stops them out.

Let's take an example of this - unfortunately I hadn't realised the potential of add-ons at this stage so haven't benefitted yet.

On the ema add-ons I'd have had the first one activated on 8th December around the 1.4828 level. Further ones would've been added on 13th Jan at around 1.4572, 3 more on 12th, 14th & 15th April all around 1.3650 area.

All these positions would still be on and my current ema is standing at 1.2536 so stop loss on these 6 positions would currently be 1.2586.

The sma positions were stopped out at 1.3650 levels but even so you can see the power of this as long as you have the guts to stay in, locking in maybe 20,30 pips a day.

If I'd realised the power of this we'd have 6 active add-ons with a total of 7420 pips locked in over 6 active positions! Each add-on I use a 2% stop loss (50 pips) - now that's what's called taking advantage of a trend!

On EU, most years you get a move over a few months - you just have to be patient to take a few losing/break even months until you get the move.

Hope this clarifies things?

Kind Regards
Steve

Each day
  • #78
  • Jun 24, 2013 5:26am Jun 24, 2013 5:26am
I think it depends on how you use MA in particular or any indicators in general. It's hard to say whether it's good or not. As long as it's good for your strategy. We both know that when we use MA, the cons of that strategy is when market is on ranging period. So, the question, in my opinion, is that. What should we do to avoid ranging market rather than considering whether moving average systems work or not.

And like all you guys know that, choosing the right position to trade is very important. But mange the risk, R:R is very important as well.

I'm using rainbow moving average system, 4H timeframe. It's good for me. But somebody may think that it's too slow. And obviously, in ranging market, the system proves to be so weak.
  • #79
  • Jun 24, 2013 6:40am Jun 24, 2013 6:40am
Quoting zenseven
{quote} Tech analysis has all attributes of religion. The basic principles do not require evidences ;-) So if you believe it works
I think what you're saying is true of "indicators", not of all "technical analysis".

There's plenty of "technical analysis" that has nothing to do with "indicators" at all.
  • #80
  • Jun 24, 2013 6:58am Jun 24, 2013 6:58am
Quoting Xela
{quote} I think what you're saying is true of "indicators", not of all "technical analysis". There's plenty of "technical analysis" that has nothing to do with "indicators" at all.
You know, I thought that Dow theory was the "first" technical analysis theory
http://en.wikipedia.org/wiki/Dow_the..._of_Dow_theory

6 tenets have nothing except postulates .
it's o'k to win ...
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