Question regarding the Moving Average Channel system!

Beginner Questions
1

Hey all I have a question regarding this method I picked up from reading the book “The Ultimate Day Trader” . Jacob Bernstein points out that this method requires 2 Simple MA’s a High set at 10 periods and a Low set at 8 periods to show a channel and give insight to if your bars move above or below the channel. He uses a confirmation method that’s on a separate graph below the chart, consisting of a Momentum indicator and another Simple MA, that when they cross they confirm the “two bar buy signal” My question is what kind of MOM and MA are these, high, low, close or open? And also I feel im missing something else because my MOM/ MA are not any where near each other on the graph. one sits on the bottom and the other sits on the top with very little adjustments in there lines.

P.S. I’m using Dealbook 360 =)

Thanks a lot guy’s
- Mike

2

Do you have any images of what it looks like? I have a general idea but don’t want to give you any wrong information.

I trade a similar way with MAs and based on crosses and confirmation with other indicators make my entries/exits.

3

I can attempt to post a few pictures from the book gimme 2 min =)

4

I uploaded two images of charts from the book lemme know if you need something else. Thanks =)

downsized_1013091422.jpg384×512 21.2 KB

downsized_1013091427.jpg384×512 23.2 KB

5

Bump, Anyone? Also Does gap trading have to be done on a day to day bases or can you set your charts to say 30 min intervals and find gaps via that way?

Thanks

  • Mike
6

I use a similar system to this using 5 period SMA of the high and lows values. In combination with Heiken-Askii bars, you don’t need anything else except perhaps an RSI. Just wait for a bar to close outside the channel and take the entry.

7

Alright cool, thanks code =)