Hello everyone, can someone help me with how to plot 2 simple moving average (SMA) with a specific period as a crossover entry? Am using 10 and 20 on a weekly chart, buh is working opposite with my stochastic and RSI indicator. I will be glad if someone help me out
Yes, moving average is a great indicator to follow because it will give you a trend-based idea.
MA crossovers give poor entry signals, the reason being that the point in time at which the crossover prints on your chart is unrelated to where price is at that precise moment. So they will perform poorly, with a higher risk than anticipated.
That said, a MA can be of greater value in confirming the direction and strength of a trend. Two MA’s do that job a little better - if the shorter is above the longer you’re probably looking at an uptrend and almost definitely not looking at a downtrend.
I would use two MA’s which have a ratio of at least 2x but not more than 5x. My choice is 20 and 50. Going shorter than 20 increases the number of trend-following opportunities per year but does not increase their reliability.
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Thank you very much Sir/Madam. I appreciate your opinion. God bless you