Trade the Charts: Moving Averages

You made a typo in the request, e. Please contact your webmaster if trade the Charts: Moving Averages are not sure what goes wrong. Stock scans are easy to write and absolutely essential to swing trading.

You need to be able to find stocks with the exact setup that you are looking for. Note: You’ll need to sign up for the Extra or Pro package to create and run scans. The Extra package is the most popular one and it’s probably all you will ever need. Now click the “Save As” button right next to “Your Favorite Scans” and your all set.

You can now run a scan and it will give you a whole list of stocks that are prime candidates for swing trading. Then all you have to do is go through these stocks and pick out the best looking setups and add them to your watch list. What does this stock scan mean? Can you tell what the components of the scan mean? In the first line we are looking for US stocks with average volume of at least 300,000. The next two lines we are finding stocks that have consecutive lower highs.

Then you have the moving average lines in the scan that finds stocks that have moved into the TAZ. The next line makes sure that the stock is in an uptrend on the weekly chart. We then use the ADX Indicator to make sure we find stocks that are trending. Finally we pick stocks with a closing price of at least 5 dollars. Scan for shorting stocks Looking for stocks on the short side? Moving average crossover scans There is another scan that I use to identify stocks that are at the beginning of a trend. It is a moving average crossover scan.

On the long side, it identifies stocks where the 10 MA has just crossed above the 30 EMA. How to find the strongest stocks Sometimes you might just want to find the strongest stocks that are trending up. This is useful for building a watch list. Want to narrow down this list? Change the ADX line from 20 to 30. How to scan for a hammer candlestick pattern Want to find stocks that have a hammer candlestick pattern for today? That should get you started with writing your own scans.

If you need help writing a specific scan, just send me an email and I’ll help you out with it. Learn to trade Trading Course This is a home study course that teaches you how to trade stocks from full-time swing trader Kevin Brown. Featured Article How to Scan For Stocks Looking for the best stocks to trade? Here is a list of the best scanning and charting services available today.

Swing Trading System Trade Triangles Are you looking for an easy trading system to follow that takes all the guesswork out of when to buy and sell stocks? Stock Market Software Tradespoon Click a button and this software program will tell you what the stock price will be into the future. Give this service a test drive. I think you will really enjoy tinkering around with this trading algorithm! Recommended Reading What Are the Best Stock Market Books? See my list of the top technical analysis books that I think every trader should own. Who’s online There are currently 6 users online.

Submitted by User on September 20, 2007 – 08:21. This Forex system was submitted by Teodosi. Hello guys i want to help all of you and i want to share you some good system. Like many traders say good system is simple one an that`s why i`ll tell you one very simple. You should only open a position, when the red tunnel is extremely narrow or crossed ! 12 WMA cross the red tunnel upwards.

If the 5 WMA also crosses the 12 WMA upwards, then the signal is extra strong. 12 WMA cross the red tunnel downwards. If the 5 WMA also crosses the 12 WMA downwards, then the signal is extra strong. This is a clear sign of a trend reversal. Thank you from all our users for sharing the system! Submitted by User on September 22, 2007 – 12:40.

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Submitted by Thomas Andreas on September 22, 2007 – 12:58. Some methods could have similar ideas. There is nothing wrong about it. We have joined our efforts not to show off our fantasy here but to work on strategies and improve trading ideas. We need people like Teodosi to start off a spark and make it into a fire. Submitted by User on September 23, 2007 – 21:38.

The method is simple, useful and you can profit very much from it. Everybody who is as generous as to share his knowledge and experience for free deserves all my respect. Thank you very much Mr Teodosi. Submitted by Teodosi on September 24, 2007 – 16:23. I`m happy to help you with something .

Trade the Charts: Moving Averages

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Submitted by User on September 29, 2007 – 05:14. I find this method very useful and interesting as well. Submitted by James on September 29, 2007 – 15:16. James: This is very wonderful, straight foward, promissing and good bases for entry confirmations.

Trade the Charts: Moving Averages

Submitted by User on October 24, 2007 – 08:33. Submitted by Victor on November 17, 2007 – 00:48. Good afternoon I from Russia and my name is Victor. Lay out on a picture an example of system as it works. With a picture to understand all sense of system it will be easier. Active traders Poll – share your live experience or read what others have to say.

How To Double The Account In 1 Day? You can help thousands improve their trading! Menu IconA vertical stack of three evenly spaced horizontal lines. Fractals are geometric shapes or curves, that when broken apart, still exhibit the same characteristics as the greater shape or curve. Let’s say you’re looking at yields on 10-year treasuries on your Bloomberg terminal.

Though the figure is constantly fluctuating, which you could view in a simple line chart, the fractal will combine multiple movements into a single bar, before graphing the next one. At right are ideal fractal patterns of five bars following price movements. Though a fractal pattern can include many more bars, or as few as three, it is generally made up of five. Since fractals lag the market, they are meant to show real, longer-term trends, as opposed to quick moves up or down.

Generally, investors use fractals with other rules or patterns. Below is a graph of the British pound against the Japanese yen, with lines drawn in where the key Fibonacci ratios stand relative to the movement. A trader integrating fractals would wait for a bearish or bullish indicator before starting a trade, and then exit when hitting the Fibonacci ratio or a fractal pattern indicating a reversal of trend. As you can see, even though there were a number of declines between 0 and 1, they were quickly followed by an increase, reinforcing the rule to stay in the trade until fractals pointed to a downturn. Next, let’s look at the Alligator indicator, which uses moving averages as the indicator to enter and exit a trade.

The trade is profitable in the beginning. However, the rule also indicates other valid points of entry that would ultimately be unprofitable. If the investor shifted on just the fractals turning negative, and ignored the Alligator indicator saying to stay in the trade, it would still be profitable. Not all traders find value in using fractals when placing bets.

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The time lag needed to produce the point of inflection limits returns. Also, sudden market movements can erase a trend a trade is following. That said, fractals present an easy way to remove some risk as you follow greater trends in a security’s move up or down. When a fractal shifts direction, it’s a quick indication to get out of your position. The theorem itself was created by Gottfried Leibniz, a mathematician and philosopher.

Years later other mathematicians would advance the theory, but it was not until 1975 when Benoît Mandelbrot gave the term fractal its name. Outside of trading, there are a number of natural settings where fractals have been observed. Moving Median: a better indicator than Moving Average? Robustness in trading is a tough beast to tame and understand. Could it be that a moving median is actually a better indicator than the moving average? The experiment To find out I used a basic and simple mechanical trading strategy: the Moving Average Crossover. This trading systems is always in the market, buys when the fast moving average crosses over the slow moving average and sells short when the fast average crosses under the slow average.

The second system would be a Moving Median Crossover. You guessed it: the same system, but replacing the average by the median. All commissions or slippage are ignored. The main interest of the experiment is the robustness of each indicator. A measure of the robustness of the indicator is the uniformity of the results over the 9 combinations. At first glance, it appears that the Moving Median indicator significantly under-performs the standard Moving Average indicator for these crossover systems. The calculation confirms the under-performance of the Moving Median Crossover system.

I started eye-balling the charts in search for some clues as to why the Median under-performs the Average. Average and Median seem to closely follow each other both on slow and fast sides. If the Moving Median Crossover system is more active in these sort of markets it will generate more losing trades while capturing similar big winners to the Moving Average Crossover system. Moving Median does not generate a significant edge in detecting large trends. One test is hardly enough to provide siginificant evidence, however this should give us some insights in the nature of the Moving Median indicator. The opposite is Mediocristan: the province dominated by the mediocre, with few extreme successes or failures.

The bell curve is grounded in Mediocristan. It’s neat to read about how you are dissecting the complex art of trading and figuring out what is really happening. I have never heard of the Moving Median before! Why use the same values for the averages and the means?

50 combination works best for the Moving Averages, then why couldn’t a different combination work best for the Moving Medians? Why couldn’t another set of 9 combinations be more robust than the ones that you chose for the Moving Averages? I think the Moving Average is the oldest technical indicator, and it is easy to use and understand. That’s why it is so common. Your results are going to be skewed by high performing systems that make tons of money because they reinvest their profits. Even if you do this with actual trading, I think during the development it is better to use a fixed dollar position size. This allows us to understand what is happening without the distorting effect of exponential growth.

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For example, the standard deviation of a set of systems that reinvest profits will always be much greater than systems that use a fixed position size. I think that it is easier to understand what is happening without this exaggerated effect. I agree that the reason that the Moving Median systems did not perform as well is because of the signals generated that did not precede a movement in price. As a related test I demonstrated the superiority of the MMDI vs the MACD by using a median for the MMDI. However the concept there was to use the median for the short term and the moving average for the long term.

In this case the crossover wasn’t significant but rather the net difference between the two—ie the zero line. You may wish to try this on the futures markets. If MMDI can be better at filtering noise out, that sounds like a perfect improvement! I’ll definitely give that a try. Do you have a link to a blog post of yours covering that by any chance? The most intriguing element for me is looking at things a little differently.

The basic logic behind MA crossovers remains intact, but you’ve chosen to look at it differently. This time it didn’t work, but I’m convinced sooner or later it will. I’m definitely working on that part. Late to the party, but I thought I’d weigh in. Folks in signal processing like to use median filters. Consider for instance processing an image from a digital camera.

We can take the data and use an MA filter, but this will just smooth out the image, making it blurry. Dead pixels, as an example, can give black or white spots in the image. Robustness must always be in reference to some disturbance or uncertainty. One should not generalize to think of this as good for return or variance. Median is considered a robust estimator because it downplays the role of any specific data point, so a small set of erroneous or non-representative data won’t skew results.

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Since you are using daily settle prices, these are already typically the average of the last few trades of the day. Thanks for dropping by and weighing in. This is an old article indeed. I just re-read it and I agree with your point that robustness does not mean low variance. I actually think David Druz said that robust systems tend to be volatile. I might decided to check it out in a back-test. Have you done any studies on linear regression vs.

It’s not astonishing that the average works better. Assume the market is going sideways and an upward trend is starting. Even the first values could get very large, the median doesn’t care about it. There each value has an influence. First it’s small but with the trend developing a mean system will react quite faster. In short: with a median system the lagging of the trading system will be increased which explains to me the underperformance in the long run. Check the list of global futures markets Wisdom Trading offer access to, from Maize in South Africa, Palm Oil in Malaysia to Korean Won, Brazilian Real or Japanese Kerosene to name a few, it is impressive and great to benefit from diversification.

Michael Füssel Breyen

Sy blog, Systematic Trading research and development, with a flavour of Trend Following. Disclaimer: Past performance is not necessarily indicative of future results. The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. THESE PERFORMANCE TABLES AND RESULTS ARE HYPOTHETICAL IN NATURE AND DO NOT REPRESENT TRADING IN ACTUAL ACCOUNTS.

Trade the Charts: Moving Averages

The Authority’ on Price Action Trading. In 2016, Nial won the Million Dollar Trader Competition. Email Support Line – Click Here. To be clear, trend analysis is only one part of the overall trading strategy I employ to enter and exit trades. It is never a good idea to enter a trade based on one factor alone, which is why I look for as much evidence as possible to confirm a trade. I am simply providing a set of filters and observations to identify the most obvious direction the market is likely to head.

Also, the market may look like it’s trending in one direction, when in fact it’s actually trending in the other direction. This is because many markets experience short-term retracements, which tend to deceive traders. We will start with the simpler techniques and work our way to the more advanced techniques. The first thing to understand about trend identification is that it is not a perfect science. I try to keep it as simple as possible and I start off by just visually observing a bare price action chart, with no indicators. If you ask different traders, you will hear different versions of what the current trend of a market is. Some will give you the short-term trend, some the long-term and some the mid-term.

We can identify that using both short-term and long-term analysis, which begins by simply observing the charts. I like to ask myself, what is the chart looking like over the last year or two, 6 months and 3 months? That shows me the long-term, mid-term and short-term views, respectively. Doing this gives me a very clear idea of the overall chart direction moving from left to right. Is this chart falling or rising?

By taking a look at the general direction of the price action in a market over the last 3 month to 1 year, we can easily see whether it’s generally trending up, down or even sideways. Identify the most obvious swing highs and lows. As markets trend, they leave behind swing points on a chart. By paying attention to these swing points we can quickly see which way a market is trending. Note, in a down-trending market you’d be more focused on swing highs and seeing if they are creating a stepping pattern to the downside. Generally, in an uptrend you will see a fairly obvious pattern of HH and HL from the market’s swing points, and in a downtrend you will see a fairly obvious pattern of LH and LL from the market’s swing points.

Does the price action repel down as in a downtrend or bounce up as in uptrend? In the chart above, we can see that all retraces higher to both horizontal resistance levels and the 21 day EMA were met with selling pressure as the dominant downtrend remained intact. Put a 200 and 50 day ema on your chart and check out the long-term slope of these ema’s. This is a good quick way to identify the overall dominant trend of a market. Notice in the chart above, the 50 and 200 period EMA’s give us a good quick-view of the dominant daily chart trend direction.

Trade the Charts: Moving Averages