MA Crossover strategies

Hi

I am interested in starting a debate on the pros and cons on this type of strategy and if they can be used to trade profitably.

I understand the basic concept of MA crossovers however how do you deal with false indication, how do you set profits and SL. Do you use them in conjunction with any other indicators successfully?

If anyone could help out with constructive / helpful advice / comment I would be grateful.

Thanks

sh5467 said:

Hi

I am interested in starting a debate on the pros and cons on this type of strategy and if they can be used to trade profitably.

I understand the basic concept of MA crossovers however how do you deal with false indication, how do you set profits and SL. Do you use them in conjunction with any other indicators successfully?

If anyone could help out with constructive / helpful advice / comment I would be grateful.

Thanks

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Has been debated ad nauseum before. Try a search on T2W for MA crossovers etc. And at Forexfactory and Elitetrader etc. Type the search into Google and all sorts of surveys, studies and debates will surface. Thus no need to re-einvent the wheel -simply search and read.

I will do some research and report back......

For such a well-known technique, I was surprised a while back that there aren't a hundred named strategies relying on MA crossovers: they exist, but not as many as there should be. Probably because it's a poor signal - MAs are lagging indicators, e.g. a 14EMA often shows by where it is today what price already started to do 7 days ago. By the time entry is made,the trader is often over-paying for the position, and price is setting up for a correction back downwards, and the cycle starts all over again.

You can also use a single MA and price to define the crossovers. I have my own system using the 14EMA and price, called 2C14X. It's profitable if traded for long periods on the major indices: it has a lot of false entries but benefits from clear stops and profit targets, so backtesting is objective. The exits could be improved to protect gains, and I hope people will tell me better target exit identifying signals so I started a thread here with that as one of my main wishes - http://www.trade2win.com/boards/uk-indices/110292-2c14x-ma-crossovers-ftse100.html

I use a MA strategy without crossover in trading Forex. Is your focus on MA or must crossover be a key element as well?