Trading using Moving averages?

[infinitym4ge]

I read somewhere on the board about the 4H Trading strategy using Moving averages.

I'm using 2 moving averages exponential (5)(20), i am looking at the differences between the different time line charts and the cross overs between the two MA's.

the differences are quite interesting, i am going to try back back test some Strategies using two different time chart's maybe the 4H to indicate possible runs and the 30M chart to plan my entry and exit points.

i know there are a lot of factors that influence the charts but if i am disciplined i think i am on the right track for a nice strategy.

what could i add to this strategy? i am guessing on MT4 you can have some sort of alarm when a possible setup is close?

im still learning MT4.

 

[tomorton]

As long as you accept that MAs are lagging indicators and that they therefore best represent the action half the period back, so you will always be late into the move.

 

[shadowninja]

How to work out when it's ranging on the 4 hours chart...

And don't take the signal on the crossover. They purely give a sense of direction.

 

[infinitym4ge]

I dont think i would take the signal at the crossover because there is always a pull back im thinking of moving in to a trade late i know but safe.

if i have a trailing stop of about 200 pips in future trading from what i have seen i can make several hundred more pips than i could potentially loose. im looking to make pips on definite trend movements.

the only thing i don't like about trading like this is i would need a substantial balance to have safe trailing stops.

 

[trader3cnd]

I dont think i would take the signal at the crossover because there is always a pull back im thinking of moving in to a trade late i know but safe

Even if you don't, there is another crossover at any point you choose and therefore you are always too late.

Think about it before it's too late...forget about moving averages and take a class to learn how to interpret price action...it's going to cost much, much less...

 

[shadowninja]

As I say, it purely gives a direction. Use price action for entry. MAs are like a windsock.