Using Moving Averages

sefty

Active member
114 3
Using Moving Averages

If you are new to the site and are new to Technical analysis the following is an ideal start. This is a simple buying strategy based on Moving Averages. It is often where most TA ( technical analysis ) users start.

If you need help you only have to ask either me or any of the folks in the trade to win chat room. We all want to make sure that your ability to learn and earn is as smooth as possible.

To start with use this strategy under the following rules,

1. Only trade ftse100 stocks

2. Only trade stocks with high volume

3. Only trade stocks that have low spreads

The aim is to make 5%. In a relatively short term ( a month )
I suggest you operate a 5% stop loss.( and impose it strictly )

Here's the strategy,

Use 5day and 10day moving averages, watch for an upward trend of both the MAs and the stocks price.
Buy if the stock price is above the MAs and when the 5DAY MA moves up through the 10DAY MA. Remember all 3 must be in an upward trend.
I use 5 and 10 as this is a short term strategy but you can use longer MAs for long trading ranges. EG 10 and 20 for 2 months or 50 and 100 for say 6 month strategy.

Its very easy to use but also very effective. But the best is you can do this for free on most charting www sites.

This is one strategy that can be used. There are loads of different approaches.
I suggest that anyone who reads this or any strategy on BBs trys it out themselves in PAPER ONLY. Do not risk your money till you are happy with the system. Ensure you are happy with it and it suits your style of trading.

Ok i'll try to post up the crossover report that i have created from the AIQ system every week. ( hopefully on friday nights so you get the weekend to have a good look )
It shows ( or will ) those stocks that in the last 5 days have crossed MAs ( the 5 day over the 10 day ) These are only ftse100 stocks and only those that do over 300k per day vol.

The other things to bear in mind with this report are the following,

Trend Score and Delta Trend Score

AIQ’s two special trend indicators, Trend Score and Delta Trend Score, appear on all group and sector reports. These indicators are explained below.

Trend Score (TS)

Trend Score is an extremely useful indication of the overall technical strength or weakness of each group or sector. It is derived from six technical indicators (MACD, Directional Movement, ADXR, Positive Volume, Volume Accumulation, and On Balance Volume). Trend Score is designed to give a quantitative measure of the current trend of these indicators.
A special expert system computes the Trend Score from the values of the six indicators. The indicators are all trend-following and the expert system consists entirely of trend-following rules. Trend Score values are similar to Expert Ratings in that they range between plus and minus 100, with large positive values indicating an uptrend and large negative values a downtrend.

Delta Trend Score (DTS)

Delta Trend Score measures the rate of change in the Trend Score from the previous day’s value. A large DTS value can be an indication of significant change and is often an early sign of improving technical conditions.


Don't forget to look for the TS and DTS for the group that the stock belongs to.


This strategy is not meant as financial advice and as always anyone using this or any other advice do so at their own risk. It is also the posting of a private investor and therefore not the advice of TRADE2WIN.CO.UK.



Good luck
Sefty
 

CHARTY

Active member
119 1
Sefty, all this is very interesting, I am referring to the TS value in particular. However, if I understand correctly your table, RR. has the highest TS value. Well, IMO, this is a stock you would not even bother running MAs on, given the fact it has been trading sideways for quite a while. is there a way of incorporating the bandwidth on the Bollinger bands as a measure of trendiness (the wider the bands, the more likely the security is to be trending)?
Thank you in advance.
Charty
 

sefty

Active member
114 3
reply

As with all these that are shown you must use these as a basis to start your analysis. As you rightly say some may not be worth the risk, in fact given the current wider picture you may well decide that none of them are.
Use other indicators and common sense to add to this strategy before you go out and buy the stock.
 

ChartMan

Legendary member
5,580 46
Agreed Sefty.
I never dismiss anyone's ideas.I look at them and decide if there is merit or otherwise.You never know what you are gonna miss otherwise.Two MA crossovers IS a recognised trading system on it's own. The thing is , wether or not it suits your syle, and wether you take other factors into account. Some will, some wont. Those that don't probably can't, for whatever reason, and they themselves may be perfectly happy with the way they trade.
The fact that someone sees RR as on opportunity to buy,someone else will see as an opportuinty to sell.
For what other reason would there be a "market" in share dealing?
 

sukhibraich

Member
74 0
Sefty & Chartman

I agreed with your points. Sefty's report is a starting point to look further into these shares.

I think AZN has TS 100 ( may column width is not big enough).

Using Sefty's post about TS & DS, you can eliminate few of these shares ( i.e. SSE, ICI, ABF etc. one with negative DS)
I may be totally wrong here.

Also may be only look at TS of say 90+. Ignore anything below 90.

Regards

Sukhi
 

sefty

Active member
114 3
been a long time

been a long time since i traded and have to some degree forgotten how to.
So come on all you gurus does the above system still hold merit.
PS i got rid of my AIQ platform years ago. Anyone know where i could get this info for free?

Take care

Sefty
 

Lightning McQueen

Moderator
4,916 780
sefty said:
been a long time since i traded and have to some degree forgotten how to.
So come on all you gurus does the above system still hold merit.
PS i got rid of my AIQ platform years ago. Anyone know where i could get this info for free?

Take care

Sefty
Hi sefty

Long time no posting by the looks of things, wasp posts about the closest to your system, its here.

http://www.trade2win.com/boards/showthread.php?t=20529

Im afraid I dont know what AIQ is, having never used or heard of it, im assuming its a charting package of sorts, like tradestation maybe.

If thats what your after then prorealtime could be ok, its free for end of day stuff, you have to pay for realtime, check it out. loads of indicators and a backtest function. if you spread bet its much the same look and feel as their charting offerings, only better.

http://www.prorealtime.com/en/

I will upload a chart of the FTSE with the Ma's on as an example.

cheers

don
 

Attachments

sefty

Active member
114 3
cheers for the tip

Thanks Don

just checking out the pro site now it looks good. End of day would suit me fine as a long term to short term strategy. Unfortunately i have to work away from home a lot so the opportunity to for scalping etc is now no longer an option. The upside though is i do get to the IOW loads which is always a pleasure. So if you fancy a pint one night and a chat let me know.

Sefty


Also whilst checking out the site i found they use this strategy which i discussed and used back in 2001 so its has certainly stood the test of time


ProBacktest Strategies

MA5 and MA20
Advanced crossing of moving averages

Detection of crossings between MA5 and MA20 :
- Buy if MA5 crosses upwards MA20
- Vente if MA5 crosses downwards MA20

This system is efficient when it comes to detect trends. It avoids entering on minor new highest and lowest, which constitute typical traps for traders.
 

Trdr

Well-known member
461 21
Help: I can only see the images Sefty has posted as a box with a red x

can someone tell me how to correct the problem. TIA.
 

lewis123

Junior member
11 0
Using Moving Averages

If you are new to the site and are new to Technical analysis the following is an ideal start. This is a simple buying strategy based on Moving Averages. It is often where most TA ( technical analysis ) users start.

If you need help you only have to ask either me or any of the folks in the trade to win chat room. We all want to make sure that your ability to learn and earn is as smooth as possible.

To start with use this strategy under the following rules,

1. Only trade ftse100 stocks

2. Only trade stocks with high volume

3. Only trade stocks that have low spreads

The aim is to make 5%. In a relatively short term ( a month )
I suggest you operate a 5% stop loss.( and impose it strictly )

Here's the strategy,

Use 5day and 10day moving averages, watch for an upward trend of both the MAs and the stocks price.
Buy if the stock price is above the MAs and when the 5DAY MA moves up through the 10DAY MA. Remember all 3 must be in an upward trend.
I use 5 and 10 as this is a short term strategy but you can use longer MAs for long trading ranges. EG 10 and 20 for 2 months or 50 and 100 for say 6 month strategy.

Its very easy to use but also very effective. But the best is you can do this for free on most charting www sites.

This is one strategy that can be used. There are loads of different approaches.
I suggest that anyone who reads this or any strategy on BBs trys it out themselves in PAPER ONLY. Do not risk your money till you are happy with the system. Ensure you are happy with it and it suits your style of trading.

Ok i'll try to post up the crossover report that i have created from the AIQ system every week. ( hopefully on friday nights so you get the weekend to have a good look )
It shows ( or will ) those stocks that in the last 5 days have crossed MAs ( the 5 day over the 10 day ) These are only ftse100 stocks and only those that do over 300k per day vol.

The other things to bear in mind with this report are the following,

Trend Score and Delta Trend Score

AIQ’s two special trend indicators, Trend Score and Delta Trend Score, appear on all group and sector reports. These indicators are explained below.

Trend Score (TS)

Trend Score is an extremely useful indication of the overall technical strength or weakness of each group or sector. It is derived from six technical indicators (MACD, Directional Movement, ADXR, Positive Volume, Volume Accumulation, and On Balance Volume). Trend Score is designed to give a quantitative measure of the current trend of these indicators.
A special expert system computes the Trend Score from the values of the six indicators. The indicators are all trend-following and the expert system consists entirely of trend-following rules. Trend Score values are similar to Expert Ratings in that they range between plus and minus 100, with large positive values indicating an uptrend and large negative values a downtrend.

Delta Trend Score (DTS)

Delta Trend Score measures the rate of change in the Trend Score from the previous day’s value. A large DTS value can be an indication of significant change and is often an early sign of improving technical conditions.


Don't forget to look for the TS and DTS for the group that the stock belongs to.


This strategy is not meant as financial advice and as always anyone using this or any other advice do so at their own risk. It is also the posting of a private investor and therefore not the advice of TRADE2WIN.CO.UK.



Good luck
Sefty

Where can I find these indicators?

Thank you.
 

JForex

Newbie
1 0
Hi,

What are the MVAs for Forex Intraday trading? It would be useful to use the same MVA's that most traders use, so they become selft-satisifying levels of support/ resistance.

Thanks.
 
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