Does anyone have any advice a good take profit from a moving average crossover strategy? I have been using a day chart, I can’t be at the computer all day.
I was thinking about getting out when i saw a few dojis or a high wick (or maybe I should look back to see older support/resistance lines, where would i start?). I was looking at this elliot wave/goodman wave but it is a bit too ambiguous for me
also, it seems that the downside of the macrossover is when the market is ranging, do the idea is to use rsi, etc to avoid it, i don’t know how to use it without losing the beginning of the breakout
As a side note, I was looking at a week chart with a moving average crossover, entering with the crossover and exiting with another crossover, and it looked overall profitable, did I just happen to be looking at a lot of trend?
I’ve never seen a profitable pure MA cross system. They utterly kill you in ranging markets. RSI or Stochastic may reduce your losses if you use them properly (ie. for reversal and hidden divergence), but I wouldn’t bother.
A road you could look down is using the Weekly chart to set your trend and then the Daily chart to trade the pullbacks from that trend. So if your MA system crosses over for a bullish signal on the Weekly, go down to the Daily and wait for a pullback based on Elliot / fib retracements. Preferably these pullbacks will coincide with other previous SR zones for higher probability. Then your entry will be a reversal signal (reversal candle / reversal divergence / engulfing bull bar). Buy on the confirmation with a stop below the swing low.
The key to success is multiple timeframes. Let the big timeframe define your trend, then look for the pullbacks on lower TFs. Single timeframe strategies have a much lower probability of working consistently.
As for taking profits - define your likely failure zones. These are going to be previous SR zones, channel lines, fib extension levels etc. Look for danger signs when price approaches these. The most reliable danger sign is slowing momentum followed by failed breaks at one of these SR zones. I will scale out when I see this or even close out completely if it’s at an expected completion of an Elliot pattern.
I always open multiple positions so that I can bank one at the first sign of trouble and then bring my other positions to break even. At this point I’ve got a small profit, there’s no risk on the table and I can let the remaining positions try and ride the swings without stress.
I hope that made some sense, and as always, it’s just my opinion.