Do you believe moving average systems work? | Page 6 | Forex Factory

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Do you believe moving average systems work?

  • #101
  • Jun 25, 2013 3:17pm Jun 25, 2013 3:17pm
OK guys I am looking at our second issue which is Exit
although I have an idea in mind , I would like to see your views before I commit to it
Have a look at this chart
based on our entry rule, price closed below 20 and 50 SMA with a red candle (first candle on chart) , we entered a short position , now we are well in profit
what would be your strategy to exit the position?
the one think you cant do right now is to take profits and run lol
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  • #102
  • Jun 25, 2013 5:02pm Jun 25, 2013 5:02pm
Quoting shahroor
OK guys I am looking at our second issue which is Exit although I have an idea in mind , I would like to see your views before I commit to it Have a look at this chart based on our entry rule, price closed below 20 and 50 SMA with a red candle (first candle on chart) , we entered a short position , now we are well in profit what would be your strategy to exit the position? the one think you cant do right now is to take profits and run lol {image}
You don't exit you run a SL under the faster MA and as it gets more into profit, drop that back to the slower MA and hope the trend keeps going.


If it finds some support, ie trades for a period of time in a range then it's likely being bought and will head higher, then bail and look to resetup near the MA's.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #103
  • Jun 25, 2013 6:15pm Jun 25, 2013 6:15pm
Quoting Turveyd
{quote} You don't exit you run a SL under the faster MA and as it gets more into profit, drop that back to the slower MA and hope the trend keeps going. If it finds some support, ie trades for a period of time in a range then it's likely being bought and will head higher, then bail and look to resetup near the MA's.
Thanks Turveyd. based on this strategy we would have been out of the trade at a very early stage when the market was only consolidating as you can see on the chart, it happened not only once but many times , any other suggestions
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  • #104
  • Jun 25, 2013 6:38pm Jun 25, 2013 6:38pm
Quoting shahroor
{quote} Thanks Turveyd. based on this strategy we would have been out of the trade at a very early stage when the market was only consolidating as you can see on the chart, it happened not only once but many times , any other suggestions {image}

Yeah it's tricky, I was looking at Shorting the middle, exits are harder than entriss for sure.

Even if you trailed a SL over there highs you wouldn't get much better, than up move was to fast.

Sometimes you've just got to be happy with what you've got and exit and find another trade, candle 5 I'd of been out on no doubt.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #105
  • Jun 25, 2013 6:43pm Jun 25, 2013 6:43pm
Moving averages you say
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  • #106
  • Jun 25, 2013 6:46pm Jun 25, 2013 6:46pm
Guys have a look at this EU chart for example and pay attention to the highlighted areas, these represent swings high and low ie price dropped or bounced significantly after touching these levels.

Do you notice something that could help us with our exit strategy?
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  • #107
  • Jun 25, 2013 6:48pm Jun 25, 2013 6:48pm
Quoting GDR3k
Moving averages you say {image}
look at this beauty, its a joy looking at this chart, nice one
  • #108
  • Jun 26, 2013 2:10am Jun 26, 2013 2:10am
I'm using Rainbow moving average and still thinking about exit the trade.
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  • #109
  • Jun 26, 2013 4:15am Jun 26, 2013 4:15am
MA should be used only as a guide.

Learning PA(price action) eg. Support resistance & Candlestick pattern are crucial to successful trading.
  • #110
  • Jun 26, 2013 6:15am Jun 26, 2013 6:15am
Quoting Pg Fx
MA should be used only as a guide. Learning PA(price action) eg. Support resistance & Candlestick pattern are crucial to successful trading.
appreciate your comment , however Moving average is a reflection of PA and I have to say I am not a strong believer in candlestick patterns therefore I wont include it in our system. The one thing am looking at is support and resistance but I am planning to use it in an unusual fashion
  • #111
  • Jun 26, 2013 6:17am Jun 26, 2013 6:17am
Quoting thienbao92
I'm using Rainbow moving average and still thinking about exit the trade. {image}
pretty chart

exit is a difficult one but there is always a way around things , stay tuned
  • #112
  • Jun 26, 2013 6:19am Jun 26, 2013 6:19am
by the way I havent had many replies to my questions above posts 103, 106
guys don't be shy, spill the beans !!
  • #113
  • Jun 26, 2013 6:24am Jun 26, 2013 6:24am
Quoting shahroor
{quote} appreciate your comment , however Moving average is a reflection of PA and I have to say I am not a strong believer in candlestick patterns therefore I wont include it in our system. The one thing am looking at is support and resistance but I am planning to use it in an unusual fashion

It's tricky on higher time frames, you'll likely find those pauses on the chart where at night or ahead of big news, you can't see support form from multiple candles ( for want of a better term ) like on M1 / M5.

Candle stick patterns due to the random nature of time, are just made up nonesense,move the start and end times around and they'll read as something totally different.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #114
  • Jun 26, 2013 1:04pm Jun 26, 2013 1:04pm
Quoting GDR3k
Moving averages you say {image}

i thought you were all fibs
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #115
  • Jun 26, 2013 1:14pm Jun 26, 2013 1:14pm
by the way guys , any of you has a way of accurate backtesting , I have one but wondered if anyone else has to help me with backtesting
  • #116
  • Jun 26, 2013 2:23pm Jun 26, 2013 2:23pm
Moving averages can be a component of a successful trend following strategy, but like any indicator, they don't work all the time. However, that is not the key to successful trading. If you are looking for a Holy Grail, it's not there. Hedge funds and CTAs who employ trend following will use breakouts, moving averages, reversals off highs and lows, bollinger bands, trading envelopes, or a combination of any of these methods. Many employ multiple strategies over multiple time frames in an attempt to smooth out their equity curves. Over a long period of time, trend following done right should provide nice compounding of capital.
  • #117
  • Jun 26, 2013 2:31pm Jun 26, 2013 2:31pm
Quoting stockietrade
Moving averages can be a component of a successful trend following strategy, but like any indicator, they don't work all the time. However, that is not the key to successful trading. If you are looking for a Holy Grail, it's not there. Hedge funds and CTAs who employ trend following will use breakouts, moving averages, reversals off highs and lows, bollinger bands, trading envelopes, or a combination of any of these methods. Many employ multiple strategies over multiple time frames in an attempt to smooth out their equity curves. Over a long period...
thanks for your comments but can we just leave the holy grail locked in the cupboard. it is not time to reveal it yet
with regards to trend following systems I agree they do work over the long run
  • #118
  • Jun 26, 2013 11:39pm Jun 26, 2013 11:39pm
Quoting Pg Fx
MA should be used only as a guide. Learning PA(price action) eg. Support resistance & Candlestick pattern are crucial to successful trading.
If somebody say just depending on MA(indicator) without using price action and you can be profitable, please give it a doubt.
  • #119
  • Jun 27, 2013 3:24am Jun 27, 2013 3:24am
shahroor, I can speak a bit now, Its funny how my daughter referred to the 3 indies as a rainbow. just think what she would say if she saw some of thee fancy charts. Anyway it has been very interesting reading but long time frames are not for me lol. i know the turtles worked off 20/50 ma and there is a lot of pips to be made. I am still working on the hour cross and it is doing extremely well after trying it out for about 5 months and like my daughter says only certain trades are taken
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #120
  • Jun 27, 2013 11:25am Jun 27, 2013 11:25am
Quoting billytt
shahroor, I can speak a bit now, Its funny how my daughter referred to the 3 indies as a rainbow. just think what she would say if she saw some of thee fancy charts. Anyway it has been very interesting reading but long time frames are not for me lol. i know the turtles worked off 20/50 ma and there is a lot of pips to be made. I am still working on the hour cross and it is doing extremely well after trying it out for about 5 months and like my daughter says only certain trades are taken
Hi billytt
I tried back testing lower timeframes but couldn't figure out a consistent way to trade it with MAs , glad you found your way
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