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  1. #1
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    Why Not to Trade MA Crossovers..

    Hello,

    Guy, ever wondered why your crossover plans sometimes fails??

    - Cross over does not mean the market is turning... does it? Remember this is comparison of 2 MA of different period not what the price is doing..
    - Best way to trade the cross over wait for the cross and confirm the trend by having the 2 MA running all most in Parallel and widening this means we have a strong trend..

    Hope this observation will help someone.

    Regards

  2. #2
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    Re: Why Not to Trade MA Crossovers..

    Quote Originally Posted by sabtron
    ... Best way to trade the cross over wait for the cross and confirm the trend by having the 2 MA running all most in Parallel and widening this means we have a strong trend...
    That's MACD. MACD changes sign on the crossover, and increasing MACD indicates divergence of two MAs or decreasing indicates convergence, hence it's name.
    regards

  3. #3
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    Re: Why Not to Trade MA Crossovers..

    thank you indo-investasi... now i become a better trader...
    Last edited by dr0o69; 08-07-2010 at 02:23 AM.

  4. #4
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    Re: Why Not to Trade MA Crossovers..

    basic problem with ma cross is the cross comes too late after price has already done its thing and also ma cross will kill you in a ranging market. First problem can be handled by entering not on a cross but when price moves convincingly above or below both MA's (need a good momentum filter) - second problem can be handled by your favorite trend filter - or only taking signals in the direction of the longer term trend.

  5. #5
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    Re: Why Not to Trade MA Crossovers..

    whats the best value for moving averages ? is a cross over at 50 considered reliable indicator of a change of direction ?

  6. #6
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    Re: Why Not to Trade MA Crossovers..

    MA cross strategy work good on trending market only, but will fail on ranging market

  7. #7
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    Re: Why Not to Trade MA Crossovers..

    Don't trade MA, they're so lagging.

  8. #8
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    Re: Why Not to Trade MA Crossovers..

    Clarence Chee from T3B Forex introduces modified MA in his
    trading system especially PIPS Intraday Trading System.
    He calls it HMA (Hull Moving Average). It is designed to be
    used with other trend identification indicator and to be applied
    on H1 time frame. It seems quite succesful.

    Just around the other corner, I prefer to study Price Action
    rather than depending on indicators. Price action gives you first hand
    info about what is happening in the market before to be translated
    into indicators.

    Since I don't like to baby sitting the computer's monitor, I practise
    swing trading and go in depth with studying price action. Indicator
    plays a very minimal role in my trading decision. I just use indicator
    to gauge the short term and long term trend. My entry and exit points
    are never based on indicators.

    It's just personal preference. Nothing to do with right or wrong.
    Trading is a probability game.

  9. #9
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    Re: Why Not to Trade MA Crossovers..

    Quote Originally Posted by nrnak
    whats the best value for moving averages ? is a cross over at 50 considered reliable indicator of a change of direction ?
    Unfortunately, there is no a best value. All values exhibit the same behavior.

  10. #10
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    Re: Why Not to Trade MA Crossovers..

    ....................
    Last edited by luke4p; 01-25-2013 at 12:26 AM.

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