A Simple Trading method

This is a discussion on A Simple Trading method within the Technical Analysis forums, part of the Methods category; Here is a blow by blow account of a simple trading method. Make of it what you will. http://www.elitetrader.com/vb/showth...6&pagenumber=3...

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Old Dec 4, 2002, 6:23pm   #1
 
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A Simple Trading method

Here is a blow by blow account of a simple trading method.

Make of it what you will.

http://www.elitetrader.com/vb/showth...6&pagenumber=3


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....Indicators show the past. Price Action "Indicates" the future.
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Old Dec 5, 2002, 11:29am   #2
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Hi, I use a similar method, but on a longer scale, used it for some time. I use 1 hour chart with 5,10 & 15 ema's. Same ema's on day chart.When ema's cross on hour chart in same direction as day trend, I enter and I exit when hour ema's cross. It simlpe, but makes me profits. Hope this is of some use.
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Old Dec 5, 2002, 6:44pm   #3
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Having looked at a few MA crossover systems, it appears that whipsaws are inherent to them. How do you avoid/minimise them in your trading?
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Old Dec 5, 2002, 8:07pm   #4
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Hi, I use what is called the bow tie system. I wait for all ema's to cross, then be in order ie. 5>10>15. if uptrending. Once crossed, I wait for the first price bar correction. ie the low of the price bar is lower than the previous. This limits wipsaws, but reduces trades. I deal on the Dow Jones index and this provides me on average 2 trades per week. If you have any other ideas to reduce wipsaws, i'm interested
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Old Dec 5, 2002, 10:21pm   #5
 
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Yes, take a look at your charts and search the archives here for "dow intraday".... It can be seen that when the price on the dow 1 min chart is within +/- 20 points of the 100EMA, then this defines very clearly a "keep out" band, i.e. don't enter a trade within this band.
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Old Dec 6, 2002, 7:27am   #6
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Whipsaws are a problem with the ma crossover system.but they can still be handy for some people if you use them to manage your trade and understand the market your trading well.
If you notice this system makes a point of only trading the US in the morning and in the afternoon.This is where the strongest moves are.When it gets to lunchtime get out because you'll be whipsawed.

There was a chap on www.siliconinvestor.com called Thomas Carr a couple years back who had a realy popular thread which had a ma crossover system.It had a realy big following,it might still be there.It made big profits on volatile Nasdaq stocks.You were always in the trade either long or short.The key seemed to be picking the right stocks and this is where the thread helped.The results were extremely good.If youre into this type of trading check it out.I think the thread was called "befriend the trend" by Thomas Carr

UPDATE.
It got me interested so i just checked it out and its still there.Its grown and added options and daytrading.Plus they've opened their own web site at www.befriendthetrend.com stating that their sytem makes 316% annualized returns?

Just for interest if anyone takes this further and looks into befriend the trend could they post their findings on the thread.Especialy if they start earning lots of profit!

Last edited by Naz; Dec 6, 2002 at 7:53am.
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Old Dec 6, 2002, 10:43am   #7
 
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For me, the surest way to make a living is on the basis of what the market is doing right now, not on the movements of moving average crossovers and things like that.

For me, just give me a Level 2 console and I will be quite happy.
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