There has been some recent interest in this method and in crossover systems in general. I recommend anyone trying this to read through the initial couple of years’ posts and you will see the pitfalls and inevitable attempts to prop it up by adding more and more indicators - MACD, ADX, Awesome oscillator, etc, etc. The inevitable aim and dream is for a simple mechanical system that does not require knowledge or expertise and can even run automatically on an EA (as you can see from the more recent years’ posts).
I would like to post here a reply from Lexys ( in my opinion one of the most useful posters on BP when she was here) about this type of system. She was replying to a comment that, “it seems that the system keeps on changing”:
This was her reply:
"This is what typically happens, in all trading forums, with long threads covering systems in which the trade entries are based on indicator crossovers.
There are thousands of aspiring traders in love with the dream that all they’ll need to do, to derive consistent income from their trading, is to come up with an automated system based on indicators which they can leave running, which will produce income without further work. Hence all the interest in indicator signals and EA’s.
Many try the system, at first enthusiastically, until it inevitably encounters its first frightening drawdown (sometimes when the market ranges, as they do about 80% of the time, instead of trending), and then the next phase is to try to “confirm the signals”(!) by using other indicators, whereupon that pattern of posting gets repeated all over again, with its ever-growing technical variations, and the thread inexorably grows without ever quite managing to make anyone rich, after all.
As so often, with trading, it’s when people imagine that they can become successful by “copying something that just ‘works’,” (wouldn’t it be lovely? ) that all the accidents tend to arise, for a whole collection of reasons outside their experience. This is how some aspiring traders come to imagine that they have “5 years’ experience” without ever actually becoming profitable at all, when the reality is that they more typically have 3 months’ poor experience repeated 20 times over, instead - and unfortunately that doesn’t really get you very far along the learning-curve. But by that stage most can’t quite face the reality that “back to square one of the education-process” is a better option than "find something else that just ‘works’, so it all tends to become a high-turnover, self-repeating cycle.
The fallacy, of course, is that it isn’t really “systems” that work: it’s traders - if they go through the appropriate phases of education, helpful practice and development, who “work”. But no matter how long they try for (and some, undeniably and by their own admission, try for years), unfortunately they can’t get those through threads like this one - and of course there are reasons for that."
Now, I do, personally, find that crossovers can be a successful method of identifying the start of a move, but not for both entry and exit. I do not believe it can be successfully automated and that it does require a large dose of personal assessment and selection concerning when a crossover “makes sense”. And that requires knowledge and experience, as Lexys says.
Anyone thinking of trialling this method is recommended to read Lexys’ post above throroughly as well as to go through the early years of this thread and you will get a clear idea of what this is all about - as well as what it is not about…
