I have been rectally looking at trading systems in general. Currently i use algorithms and am making profit, however it is always a good idea to find ways of making extra money in Forex trading and also further developing knowledge of the market. So i started looking at manual trading strategies. I have been working with one that is moving average based. Basically a cross of the two moving averages. However i noticed that i kept having to make new demo accounts due to losses. So i thought, why don’t i just reverse my shorts and longs, everything else equal, these accounts will be positive?
Surly people have thought of this before. So is this perhaps what some real systems do? Any pit falls to this approach?
Most likely the result will be exactly the same. A slow drain on the account.
Think of it like mean tide level. Your entry happens at mean tide on the cross, but the fluctuation higher or lower is generally equal on both sides. So even if a buy is now a sell, you still wind up in the same position of losing a little at a time until it’s gone.
Try a few backtests. Coding something like that is a piece of cake, just code up the reverse, and watch the results.
Who says it is?
Personally, it seems like a complete waste of time, effort & money especially if you reckon you already possess something that’s making you profit.
Why not take the smarter route & see if there’s any room for improvement left in what you’re already doing or replicating along similar lines.
If not, then as your betting pot increases simply crank up your size & maximize the returns.
I started trading with moving average cross. I have traded 1 hour and up as well as 30 minute and below. From my personal experience I don’t want to tell you that this strategy is a waste of time because for me it was a valuable learning experience but again in my experience not profitable long term. I think people that are trying to sell you something push this strategy, cause on face it’s easy. Set your 2 moving averages and wait for the cross then confirm it with whatever they want you to buy.
The problem with the cross no matter what you use simple, exponential and/or weighted as well as whatever time frame or frames you want to use it on is the same. Doesn’t take into account all the other factors that affect price. The cross only happens after everything is already done.
There are much better mechanical systems out there. Again in my opinion you want to keep it as simple as you can while still getting accurate entries, stop loss and take profit. Go to utube and search VSA, Supply and Demand, Money flow analysis (all the same principle) or a simple breakout system. Long term results are much better in my opinion. If after that you still want to use the MA cross, break your trade down to Trend, Momentum, Cycle Support and Resistance. Again for best results, use any trend, momentum, let the cycle be MA cross and an indicator to draw your support and resistance I used pivot points.
The best results using a MA cross would be medium term moving averages, to use anything under 30 minutes you really have to know what you’re doing, because you get tons of fake signals. I would use at least a 24/12 cross confirm with other indicators and enter a candle or two after the cross, same with exit when the MA’s are getting closer take that as a sign the current cycle is coming to the end. Hope that helps
Gp
If, in your view they’re not long-term net profitable, then why encourage him to waste precious time attempting to construct a strategy based around them?
He’s already indicated that an algo driven model is returning a positive expectancy & he’s been (rightly) encouraged to pursue that route further.
Apparently he’s already conducted most of the hard/smart work.
Quite why he would choose to deviate from that route & make life infinitely more difficult for himself is puzzling to say the least.
It’s equally puzzling why, in one breath you’re saying moving average crosses aren’t profitable, yet in the other breath you’re extoling the virtues of specific set up criteria?!
cyris, do yourself a huge favor buddy & follow Thalia’s advice!
Ditto, but that isn’t a trait exclusive to newbies.
You only need casually browse this & other similar sites on a regular basis to witness it time & time again.
It’s very peculiar indeed, but I guess it takes all sorts to make a world.
