Moving Averages Again...

[TacTrader 10]

Thought about reopening one of the older MA threads but maybe a new one will draw the MA traders out of the shadows for some good conversation.

 

I am tooling around with an 8 period weighted MA on a 2 min YM chart. I am also employing a 50 and 200 WMA for visual support and resistance. The setup is simple: When price is above the 8MA enter short on a close below the MA, opposite for long trades. The close above/below is the confirmation to enter so simply trading through it does not count. This generates alot of trades through the day so I would like to find something to knock down the frequency a bit...maybe going to a 5 minute, but it is not as visual for me. Plus I am more comfortable with the quicker in/out as my tolerance and personal preference does not bode well for longer term stuff.

 

As far as exits go I place a 10 point stop and get out half at 11 points profit then keep the other half on for a bigger move. I am also considering a time stop (5 min) along with the initial 10 point as it seems that if the price doesn't move right away it will usually consolidate and the chance to stop me out at -10 rises considerably.

 

I don't have backtesting ability as I use OEC Trader for my charting but in sim mode it seems to work well. I am comfortable with MA's which is why I am looking at them and I have a KISS (keep it super simple) mentality since I am no rocket scientist

 

So what are your thoughts? Am I being too simple? Too tight a stop? Anyone using something similar? Hopefully some good conversation on a simple strategy will follow....

 

Stephen

[pluto7up 10]

IMHO, this system will not be profitable. MAs do not work fine for opening signals. You probably should add an oscillator to the system.

[stanlyd 10]

If you want to lower the amount of trades you may want to consider looking at a longer timeframe then the one your signals trading off. Try to determine what the direction of the market on the bigger scale is before you decide to take a trade. This will help you to avoid "fighting" the longer term trends and therefore putting probability in your favor of the longer term move on the second half of your position.

[Blu Bull 10]

there's also the 9/30 method or 5-13-62 methods. I'm not promoting this site and I'm not a member but there's video that explains the 9/30 method perfectly. shows where to place stops and everything. http://www.efuturevision.com there's a great free video explaining the method perfectly also http://www.ebookspdf.com/business/74/rob-booker-51362-forex-strategy/ It's system that buys/sells on pullbacks

[dave63 10]

I checked out the 9/30. Thanks for the link. I like the filters

 

Has anyone tried to code this method into QuoteTracker?

[Dacamic 10]

IMHO, this system will not be profitable. MAs do not work fine for opening signals. You probably should add an oscillator to the system.

This is my expectation, too, based upon experience. Naturally, my lack of success in this regard does not preclude better fortune for your system. I agree with pluto7up, though, that additional filters might be needed.