I use the 50 sma on a daily chart and if the chart is above I buy the currency if the currency is below the 50 sma i sell it
How long have you be trading this system? How do you decide to exit?
What do you do when the candle crosses the 50 sma? Do you add to winning positions the next day?
Do you wait for the candle to close or enter upon an immediate cross or cross plus so-many-pips?
Has anyone done any backtest or live trades using this?
ah… a slanted line. Works as good as a horizontal one
Simple systems seem to work best. I like this.
ah… a slanted line. Works as good as a horizontal one
This is true
Thats why I trade in circles:D
From the chart it looks like you may have better luck trading towards the line??
How does one go about an entry for this strategy? Immediately upon crossing the 50ma? Or a stop order of 10, 15, or 20 pips from the price at the line? Wait for the Daily close and see what happens next? As has been said in many forums, simple doesn’t mean easy.
This is like a moving average cross over strategy, The fast moving average is a 1 period which is the same thing as current price. The slow period in this case is 50MA,
(At the extremes, a MA with an infinite period would be flat horizontal and one with a zero period would be straight vertical :rolleyes: )
The hard thing about MA crossovers is staying out of trouble when the range starts. 1H is tricky enough. Good idea to use a daily, you would have more time to react to changing conditions.If price breaks 50 day MA enter long (with n% equity)
If price breaks below 50 day MA close long and enter short (with n% equity)
Simple enough.
I would say the hardest thing about MA crossovers is sticking to your system while watching your winnings evaporate as you wait for your exit signal.
Yet, ironically, traders who consistently pull their money out early to avoid such ‘losses’ also avoid benefiting from large trends when they occur, making them less profitable in the long run.
Perhaps this is where the expression “bulls and bears make money, but pigs get slaughtered” comes from?
I tried about 3 variations of TRO’s “All you need is a horizontal line” strategy & never made more than I lost albeit it was on the 1H TF. Which is why I’m a little gun shy trying this - I treat demo just as if it is real money. My real money account ain’t so hot right now either.
But pipso, if I read you correctly, take the trade at the line regardless of when it happens. I’ll try that. Thanks, d.
This confirms my research. Trend-following on 1 hour time frames does not work. I use daily.
I use a long term filter for trend direction and short term breakout for entry/exit
Trend-following on 1 hour time frames does not work
That depends on how you define “trend” and how you set up your trade with TP and SL.
Any strat like this that may not have the highest win probability MM and risk management become very important. Cut the losers sooner be ready to let a winner run to offset multiple stop hits. Thats how I would play it.
I’ve set up steam-roller charts to try out entire ranges of trend definitions. Stop-Loss was percentage equity. Take-profit in trend following tends to be like conditions that triggered entry.
My results on hourly data range from break even to net loss. To be profitable, the amount of hours in the look-back period become so great that it makes daily data more simple to calculate.
Any strat like this that may not have the highest win probability MM and risk management become very important. Cut the losers sooner be ready to let a winner run to offset multiple stop hits. Thats how I would play it.
Trend-following systems do not depend on win percentage for their profitability. You’re right, that’s where money-management is important.