Moving Averages

I’ve been doing some backtesting on MA crossovers and it seems like a fairly good system. I’m using an SMA of 252 and an EMA of 14. It seems to be most effective on hourly chart (although larger frames will work, but I don’t like keeping positions open for several days/weeks).

I will do live testing of this very simple strategy with micro lots over the next month (in conjunction with all my other strategies). Does anyone use a similar method? I would like to know how and when you exit your positions. Any other pearls of wisdom would be most appreciated.

For the complete newbies: Open a long position when the SMA crosses below the EMA, and Open a short position when the SMA crosses above the EMA.

I started using a SMA cross on 1hr and 30 min time frames. Worked really well. 8 period and 3 period. If that’s to choppy another good one was 30 period SMA and 8 SMA you can use the close. No matter what periods you use, you need to con firm with another indicator: stoc, RSI or MACD When 8 is on top , go short, when 3 is on top go long. All crosses work the same way larger period go short when shorter is on top go long. Problem with it is again same for all, you pretty much have to sit and wait for the cross. But it is profitable

Good work Zaghloul!
Reminds me of the good old days as a student. I traded the heck out of crossovers. An excellent way for a newbie to start off their trading journey.

Very good working Zaghloul

  • Why not use the fib numbers instead 1,2,3,5,8,13,21,34,89,144
    *** and a combination of

MA and SMA ogg AA and DA with EFD plus DAD provides a wonderful succeed.

Raghee Horner has earned fantastic amount of its 34 EMA WAVE …
Study her movie amazing ,and ask youy self how mush money doyou think she has made with her system …

Simple Steps for Identifying a Trend - YouTube

[B]Zaghloul

My post was an attempt at sarcasm …
Playing with ma that you make is complet is vast of time …

[/B]
[B]Horner is a lady who has deceived thousands of traders into buying futile trading strategies.
In a time she sold strategies of every single indicators and variations of them.

Instead take a look at this video, study what Brooks is trying to tell …
If you have a desire to become a trader try to understand what Brooks preaches in this video if not continue with the MA crossovers … and become a forum zombie
[/B]
Al Brooks on Probabilities, Timing, Scaling - YouTube

There is a fine line between sarcasm and d**kishness. Anyways, MA crossovers can be very successful if you have proper money management skills.

@ Zaghloul

I guess you’ve been up all night and played with Fib MA crossovers …

In my kindness I sent one video with content that is essential for every trader …

Without that knowledge, the MA crossover and all other indicators as well as money management you are doomed to be a loser …

If you choose to try to acquire the knowledge it is up to you …

Statistically, you have no brain or the ability to utilize the advantage of this knowledge

So please surprise me in a positiv way


Maybe I’ll just invest my money under your management in “Douchebag PAMM” :18:

torulf39, you’re being a bit mean, nasty and disrespectful, no?

Al Brooks has a fine reputation as a trading instructor, but his methods are NOT the ONLY METHODS that work.

As a matter of fact, there are many winning methods that can be used to succeed in the markets. Yes, even ma cross methods traded in a proper context/method can be successful and profitable.

But the more important point, there’s no reason to be insulting folks that chose to go about trading in a fashion different than yours.

PS And I wouldn’t be too quick to write off Raghee’s 34-ema wave, used in the proper context the 34-ema wave can be surprisingly profitable.

.

D-pip

Hard and provocative is a correct description …

It is an extreme ignorance when it comes to trading in general over the internet the worst group are those who sell systems based on combinations of various indicators .

Robb Booker is one in a unique position when it comes to figure up imaginative names of dozens of systems he has sold.

All indicator systems are profitable but when . !


Below are two chart , enlight me which Ema is best … and what day …
Is EMA 34 is better than the others ! !

Of course AL Brooks is not the only method that works. you can find some other serious players .

When it comes to basic understanding is that not many people who have the same depth of the market as Al Brooks …

You do not have to trade in the same way as Al Brooks but the knowledge of how the market works is a minimum basis that every trader should acquire .

Therefore I repeat Al Brooks and a few others because they represent knowledge that few that offer training for forex aspirants have.



Zaghloul
We do not accept demo money in Douchebag …

I hope you enjoy the video I referred to in my previous post …
I hope for your own sake that you take the time to study the material in a thorough manner …

You will get a free share advice me purchase shares of the company that develops Douchebag
They have not yet begun to sell in Canada and the U.S. …

Feel free to insult internet snake oil sales people trying to sell BS trading systems to uneducated newbie traders.

But you have absolutely no right to be insulting Zaghloul and derailing the thread with attempts at sarcasm and rude comments.

Zaghloul posted a method that he/she had been doing some back testing with, he/she was not trying to sell anything to anyone.

And what the heck does Robb Booker’s trading systems have to do with Zaghloul’s thread?

As far as which moving average works best? If used properly within a triple screen method you’ll find any sma or ema between 5 and 200 will do just fine.

PS Maybe it’s time for you to pack up, head out of the babypips door and find a place that appreciates your insulting trolling.

Is there any difference between a BS snake salesman who sells 200/5 ema strategy and ignorance trader who shares his ignorance on a forum … !

Both do irreparable damage to other ignorant traders …
They stop the development of many traders …

The money will they lose regardless of whether they go to a snake sale person or not … Chris capre is strategically placed in this forum … and his disciples.
*In fxstreet he had nearly 10 fake forum members who praised him by himself …

*
Zaghloul should be happy that I’m trying to provoke him / her , , , saying hei you throw away your time , do something else , try this much better ,

In my time I walked around and fantasized about combinations of Ema

[B]So if 5 ema cross over 200 ema is the bull trend and vice versa ! !

Enlight me with those chart …under

Total lack of logic that a belief that this type of fixed ruled will work over time …

To focus on inventing combinations in which one believes that one will be profitable are useless
For a new trader

In the old days when the market often moved more in a harmonic trend then did this kind of astrology worked surprisingly well today it is financial suicide …
[/B]

I mention rob booker because he has the world record in selling numerous varieties of fixed rules strategies which every newbie has lost their money wasted their time …



Good god, now what does Chris Capre and sox-puppets on Fxstreet have to do with Zaghloul starting a thread about a system he/she has been back testing? And he/she should be happy you said they were going to become a forum zombie, really?

Also, if you read my post a bit more carefully you’d see I didn’t say a 5-ema cross over a 200-ema is a bull trend, you did, not me.

If you’re trading the hourly chart and the price is above the 5-sma on the weekly chart. And above the 5-sma on the daily chart, after the price also crosses above the 5-sma on the hourly chart, I’d say it’s pretty safe to trade as if it’s a bull trend. That’s just my opinion based on a quick simple triple screen 5-sma set-up.

Same could be said with the 200-sma, above the 200-sma on the weekly, daily and hourly, might want to favor long trades.

Now, here’s where it gets a little complicated so hang on, slow down and read carefully. If the 5-sma is above the 200-sma on the weekly chart and the 5-sma is above the 200-sma on the daily chart, would you be looking for long trades or short trades when the 5-sma crosses above the 200-sma on the hourly chart? Hoping you answered long.

Want to trade shorter time frames? 60 sma on the 4-h, 1-h & 5-m happens to be a long standing favorite of mine, 20-sma on the daily, 4-h and 30-m is pretty nice too.

With the proper understanding and use of a triple screen method a trader can adjust, adapt and play with different time frames, different moving averages. Maybe even add some marked up S/R or S/D levels, previous highs/ lows, candle patterns, bolls bands, indicator of their choice, etc and come up with a trading style that fits their lives and trading schedules.

And, when the 34-sma or ema line up in the same direction on the weekly, daily and 4-hour charts, trading the breaks of previous highs/lows in the direction of the sma/ema can be very profitable. Take a quick look at GBP/USD with a 34-sma or ema and toogle through the weekly, daily & 4-hour charts from mid summer 20013 until the year-end. :smiley: I realize this is different than scalping a few pips off the 5-minute charts. :17:

Now move along and go hang out in Al’s $100/month chat room and quit tormenting babypips members.

@torulf39, seriously what the **** is wrong with you? Its not like I was even saying that MA crossovers are a holy grail. Its something I’m tinkering with and about to test live with micro lots. You’re acting like I was selling a time share in Cyprus to your elderly mother. Now go off and make millions with your wizardly magical trading abilities, and leave this thread alone.

Back to topic.

@d-pip, I like the idea of using multiple time frames to ascertain the ma crossovers, I will look into that. I’m also tinkering with an Aroon oscillator to help weed out the whipsaws, which seems to really help with the 1h time frame. I’m also starting to find that a TMA has earlier and more accurate crosses over the SMA (more earlier and accurate than EMA crosses over the SMA).

However, my initial question still remains. How do you know when to close a profitable position? In backtesting, I could see myself closing many profitable positions way too early because they start losing 50% or more of the profit only to go back up much much higher than the first high. Is there any way to gauge this? Or does this go back to money management and partial take profits?

Zaghloul, If you put torulf39 on your “Edit Ignore List” he/she/it won’t be able to post on your thread! :smiley:

Later on this morning I’ll post more info on mult-time-frame and your TP question.

I like multi-time-frame/triple screen methods, and so have a lot of the experienced traders that have come and gone over the years here on the bp forum. When there’s a clear and obvious trend, multi-time-frame/triple screen methods are straight forward and relatively easy to trade successfully.

On the downside, when the market is running flat, consolidating, confused, and direction-less, mtf methods don’t work so well and you’re better off waiting until a nice trend kicks in. Make money when the trends are strong and go skiing when they’re not.:smiley:

Here are links to a few threads that incorporate moving averages and multi-time-frame/ triple screen methods, 3 ducks happens to be my favorite. On the 3-pigs thread you’ll also read about two TP methods, trailing stops v fixed targets, both seem to have merit. The results of the two TP methods on the thread demonstrate there’s no easy one size fits all answer. A long time bp member has worked out a straight forward method that he can trade around his work schedule, he explains it on his trendlover thread.

http://forums.babypips.com/free-forex-trading-systems/6580-3-ducks-trading-system.html

http://forums.babypips.com/free-forex-trading-systems/55216-3-little-pigs-trading-system.html

http://forums.babypips.com/free-forex-trading-systems/62735-trendlover.html

I’ll also add a link to the Cowabunga System, not because I feel it’s a great system, but because it’s a good example of a simple double screen ema cross method. Always trading the 15-m ema cross in the same direction as the 4-h ema cross.
So You’ve Finished The School Of Pipsology…Now What? | Forex Blog: Pip My System

When to take profits? Good question, an issue I struggle with all the time, especially this week. :17: I’ve found that the average true range can be a “somewhat” useful tool in setting TP levels.

Let’s say we’re intraday trading, the 20 day ATR of the pair you’re trading is 100 pips. At the London open you have a confirmed signal and enter a trade. The pair has already printed a 30 pip range for the day, maybe your TP would be 60-70 pips with the hope that the pair will move the full ATR of 100 pips. I’ve heard some folks will start taking profits around the 70% of the ATR, something about a bird in the hand…

If you’re swing trading multi-day trades, keep an eye on the weekly and month ATR. Tracking the ATRs isn’t a holy grail because some days & weeks the market will move more or less than the ATRs, but it still can be a “somewhat” useful tool. Again, I feel the example/comparison of the two TP methods on the 3-pigs thread is worth reading, both methods seem to have a nice gain.

hope this helps

[QUOTE=Zaghloul

However, my initial question still remains. How do you know when to close a profitable position?[/QUOTE]

I agree. Multi time frames is a great way to go. I also found when I used any MA cross the same thing. Gave great entries, but no reliable exits. I spoke with a lot of traders who use the cross and it is always the same great entries, kills on exits. I used MACD and Stochastic mostly and so many other combos I can not even remember. So for me I changed my strategy from trying to pick tops and bottoms to picking profitable middles. Much easier.

I also agree with multi time frames in sideways and even ranging markets are no good. I saw that today with gpbusd and audusd. So I start with Multi time frames and if I get mixed signals, I drop down and use a single time frame. But again like d-Pip stated. Most of the time, just wait for the trends. Personally I think you are better off, looking at more currencies to find a trend if you do not have a good short term strategy.

Great thread Z. Here is a tip I taught when I was teach. . .try to limit yourself to one useless debate a day. (nice part is you get to make the definition of useless), and before you get involved in any debate, ask yourself is going back and forth with this topic going to get me closer or put me further from my goals. If people took the time to ask Chris Capri and the others who some people like to refer to. He will tell you the same thing any honest trader will tell you. No matter what method you use in trading there is no one method that is always right. Which is why there is 3 parts to the success storey: Method, Money and Mindset.

Zaghloul

Regarding your question, when one should take profit when one is in a profit position.

*** I was sent a video explaining the theme you called on a very thorough manner.
** As expected, you have not understood this.

D-pip

I rest my case, As mentioned previously fixed indicator trading rules is doomed to fail over time …
My claim to educate you self into fixed indicators trading you become a forex loser - …

Good luck

gp00053

I will in no way take you away the illusion you have about forextrading.

Chris Capre is like most other educators you find over internet 100% dishonest …


Let me start off with apologies to the people posting and following this thread. I’m sorry about being off topic and give you my workd this will be the only post I make in this thread off topic.

Having said that. I wanted to thank you my friend. and you do understand “My money, my illusion” Here’s an illusion you may want to address, preferably in your own thread, the illusion of going right when everyone is going left.

Let me offer another piece of advice. How to make a good decision. Firstly Chris Capre can defend himself, but with regards to your statement, it’s like my good friend John Leonard says " Your are entitled to your own opinion; but not your own facts. But if I had to pick someone to listen to, it would someone who is a very active member not only in this community, but all through the forex, almost everyday. It wouldn’t be someone who doesn’t seem to understand English and continues to hijack another traders thread. What people like you don’t understand we’ve heard your dribble time and time again. You come to community and spout off the same BS you say the traders you call gurus do. Your way is the only way, everyone else his stupid who doesn’t follow you. Chris Capre doesn’t say his is the only way and you’re stupid if you don’t follow. But again people like you never let facts get in the way of your BS. Just make statements with no facts. . .bla, bla bla. Here’s another illusion for you. That you still be around here to post 200 times. You’ll spout off your BS, take are kindness for weakness and when we stop paying attention, you’ll move on.

Again apologies to everyone
Gp