Yeh, I understand what you’re saying. I was the same in my earlier years. What im afraid of is that if that crossover system worked then the person using it may not tell you it works. People will not automatically give away their strategy because someone asked for an opinion. Therefore you have to test it yourself. Although it might take time and effort, atleast you’ll be sure its tested and works or doesnt work. You dont have to do it today but keep it in mind when you have time off. It may add to your trading
Correct
Cheers
Blackduck
yes good point thanks , i feel ive found a niche over the last 6 months i dont really want to complicate things .maybe one of the attractions of trading is choice and so many variables
The first thing to know about moving averages is that they are a lagging indicator. This means that they are based on past price action.
The use of moving averages for trend analysis is arguably the most common use of the indicator and like most things in trading, using moving averages to analyze a trend isn’t a perfect science. Nor is it something you want to solely rely on. However when used properly moving averages can make identifying a trend much easier.
Moving averages can also be used as dynamic support and resistance. There are several moving averages which carry more weight than most in forex, these being the 10, 20, 50, 100 and 200.
Because the periods above are most commonly used, the market will tend to respect them more than others. Similarly to why support and resistance works. If enough traders are using the same level to buy or sell a particular market, then that market is probable to react to those levels.
Finally, moving averages can help you determine if a market is overextended so that you avoid buying or selling too far into a move. It is never ideal to enter a market that is overextended. The use of moving averages can help you determine if that is the case.
Personally, since moving averages are a lagging indicator I would not advise using them to enter a trade without other confirmation.
Just my two pips, back test if you want though and do whatever makes you money!
Good luck
in a nutshell
Moving averages work and make sense just like every other indicator.
As we can sudy in the school of pipsology, no indicator works alone.
You need other complementary rules/filters, good targets and good stops.
This trackrecord of mine has been acheved with moving averages as main indicator.
https://www.myfxbook.com/members/CavaliereVerde/knightfollower/2293261
Crossing moving averages works very well when markets have a strong momentum inefficiency.
The point is : are parameters robust or thay need to be continuously reoptimized to be in sinch with the market?
I’m fully aware this is an old thread that possibly doesn’t need to be revived… I’ll do it anyway.
After 1000’s of hours of back testing Bots and Indicators I have started to notice a few peculiar patterns.
Using specialist software that allows real historical (tick data) prices to be applied to strategies at 5, 10 and 20k times the speed of real price action movements.
That the SMA 236 is always more successful than the tried and tested SMA 200… When optimising an Indicator or Bots parameters, 236 periods is consistently a parameter that is decided by the software to be the best slow/long MA when used in a large number of strategies…
Just thought I would would share this anomaly with the handful here that bother to read actual strategy posts and the even less that may attempt to test it…
As you were…
A moving average is a statistic that measures how much a data series has changed over time. Technical analysts in finance frequently use moving averages to examine price patterns for individual securities. A rising trend in a moving average could indicate an increase in the price or momentum of a security, whilst a falling trend would indicate a decline. There are many different types of moving averages available today, ranging from simple measures to sophisticated formulas that require a computer programme to calculate quickly.