Replies to This Discussion

Permalink Reply by Arjun Gadhia on July 5, 2012 at 6:27am

hi looks like a nice strategy..

what success rating would you give this if you have been using it

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Permalink Reply by Somaira Bashir on July 5, 2012 at 10:21am

 This strategy should give good results in trending market but no really good for range market.

I am testing it my self currently, so I will update you on it as soon as I have some decent number of trades. You are more then welcome to try it and let me know your experience. It is always recommended to try new strategy in Demo account.

Best

-Somaira

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Permalink Reply by Simran Dhillon on July 5, 2012 at 6:47pm

Great Strategy, seems to have a good risk to reward potential.

Do you take your profits early or do you wait till price closes below the SMA (20) to exit the entire trade?

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Permalink Reply by Somaira Bashir on July 5, 2012 at 11:09pm

You can add to or take out from positions depending on the momentum of the trend, here momentum can be gauged by looking at slope of MA, if slope remains steep you can add and if it start to diminish you can start taking out profits.

In above snapshot one may have consider lightening up the position when SMA (10) start to loss some momentum as the price retrace to SMA(10) and could have added to position once it bounced off SMA (20) and crossed SMA (10).

Thanks for comments

-Somaira

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Permalink Reply by Abie Mokobane on July 6, 2012 at 4:31pm

Hello Everyone

I have two issues with MA cross over strategies.

1.By the time the crossover happens,price has moved quite a bit ( meaning chances  of price reversal increases). To ignore small price retraces, maybe a filter is needed e.g. Using a higher time to confirm a trend.

2. How does one measure the angle/slope of the MA? It is quite subjective to me because some trade might see the slope as steep while the other as gentle. 

I would like to hear how other traders trade with MA crosses,as for me, most good trades came from using MA as support and resistance ( bounces).

Kind Regards

Abie

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Permalink Reply by Somaira Bashir on July 7, 2012 at 5:54am

 Abie, one can soley trade on one indicator be it stoch, MACD or MA, most of the the technical traders use some combination or price action with indicators so you can confirm trend and entries using other indicators as for issues listed

1 - you can chose Shorter (Faster) MAs like 10, 20 that and one can even chose EMA rather then SMA that will indicate trend quicker but issues with faster on is false signal. So one has to look for balance.

2 - measuring slope, yes this is subjective but as other things in trading it comes with practice so when you do practice a strategy you can start to have a good feel of slop, if you have to put a number you can say lets say 45 angel but again it comes with experience as everything else in trading

Best

Somaira

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