Moving Averages, has anyone tried this

[stoploss please]

I have been experimenting with my chart indicators to see if I could find new ways of using them.

One idea I have tried is using two moving averages of the same value. However, one is Exponential and the other Volume Weighted.

I have applied two 20 minute MAs on a 5 minute chart. I have watched how these averages move prior to a trend starting and during a trend.

I have not tested my findings or used this set up to enter transactions. However, I do have some observations. Just wondering if anyone else has given this a go.

Bullish Trend
1.The EMA is layered above the VWMA
2.The EMA leads the VWMA in the up trend
3.As the trend matures VWMA crosses over the EMA

Bearish Trend
1.The EMA is layered below the VWMA
2.The EMA leads the VWMA in the down trend
3.As the trend matures VWMA crosses under the EMA

As I have not carried out any major back testing not sure how well this works. However, it has seemed to be consistent.

Even if it is proven to work, it will not give a signal to exit. However the VWMA cross should give you a warning that the move is mature.

 

[sandpiper]

Andy,

Took me a while to get the same chart as you (since you really meant two 20 period MAs, rather than two 20 minute MAs). Didn't take me this long , I was just waiting to see if anybody else replied. As to the indicators in question....

Intuitively, you would think that an average based purely on price compared with an indicator based on price and volume should be useful. However, volume weighted ma's are dreadful things, neither fish nor fowl so to speak (with the possible exception of VWAP... and then used in a completely different way).... sorry frugi . The lag means that you are in danger of 'seeing' things in relation to volume that are just not there. Worse, I think, is that fact that it encourages you to evaluate price action at exactly the wrong times. At least with your OBV, price action vs volume is evaluated at the right times, looking for divergence/confirmation.

As regards the consistency. I've looked and I just can't see it.

 

[stoploss please]

Hi Sandpiper

Played about with this a bit more. More of a fluke than consistent results using layered MAs.

As you know, I like to muck about with indicators and other Chart tools to see if I can get any more juice from them.

I will have to confine this one to the dustbin.