Simple moving average - too simple?

[newspreadbetter]

Still relatively new to spread betting the indices, so please bear with me, I've seen a simple moving average example and wanted to run it past you guys.


MA with it set at 10, 30 and remove the 3rd line.

Been watching the FTSE for a few sessions and everytime the 10MA crosses above the 30 line, the SP rises. Everytime it dips below the 30MA line, the price drops.

Told you it was simple, maybe too simple. Please remember I'm starting from scratch (almost)

Any feedback/advice/observations or criticisms

 

[dbphoenix]

You have it reversed. When the index rises or falls, the MA follows suit. The MA can't move first due to what it is.

 

[IFeelFree]

Still relatively new to spread betting the indices, so please bear with me, I've seen a simple moving average example and wanted to run it past you guys.


MA with it set at 10, 30 and remove the 3rd line.

Been watching the FTSE for a few sessions and everytime the 10MA crosses above the 30 line, the SP rises. Everytime it dips below the 30MA line, the price drops.

Told you it was simple, maybe too simple. Please remember I'm starting from scratch (almost)

Any feedback/advice/observations or criticisms

Try using a Bollinger band with 20-period MA and 2 standard deviation band. The bands give you a sense of the significance of any price move above/below the moving average (relative to recent volatility). When the price touches the lower/upper band, it can be interpreted as a buy/sell signal. I do something similar, except a bit more sophisticated -- a Kalman filter applied to a cointegrated portfolio.

 

[newspreadbetter]

You have it reversed. When the index rises or falls, the MA follows suit. The MA can't move first due to what it is.

Apologies dbphoenix, I knew what I meant to say, just it came out wrong

 

[dbphoenix]

No need to apologize. Just remember that the faster MA crosses the slower because price has risen or at minimum altered its downward trajectory. Ditto the reverse. Thus the crossover alone will either be a false signal or a late signal. Better to evaluate the price movement without aids.

Db

 

[Forexmospherian]

No need to apologize. Just remember that the faster MA crosses the slower because price has risen or at minimum altered its downward trajectory. Ditto the reverse. Thus the crossover alone will either be a false signal or a late signal. Better to evaluate the price movement without aids.

Db

Hi DB

Whilst I think your TL - SLA approach is nice and simple and works - I would have to slightly disagree with the idea of not using aids

We all know the MA's are supposed to be tools used by the industry - whether SMA's or others - as far as I am concerned there is a far better tool and that is Linear regression indicators and not lines

They may appear similar to a MA - but they have far superior qualities - they are quicker ( less lag) and their unique characteristics actually enable you to use them as a LEADING indicator - ie the price structure bias they give off a tick or one minute time frame is in advance to just normal price action and so again superior to trying to read price naked or with no aids

I have been using them for approximately 10 years and over 7 yrs full time and so have been able to study them in detail - but purely for FX trading - not indices or other instruments

I tried naked trading off a 1 minute for over 3 months - but found I would lose an advantage of anything from 10 to 25 pips a day over 15 trades compared to using my LR aids.

Naked trading is OK for obtaining normal profitable returns for an experienced trader - however, if you want far higher returns along with more accuracy - then a combination of TL's and LRs are basically "unmatchable" in terms of performance levels

Regards

F

 

[dbphoenix]

Thank you for a courteous response.

Indicators may provide unmatchable results, but I've never seen any evidence of it. As for naked trading off a 1m, if one is doing it without regard to context then I have every reason to believe that results would be disappointing to say the least.

As for professionals using indicators, I've never seen any evidence of that, either (and by "professionals" I mean those who are actually moving money, not those who are writing articles). This is not to say that one can't come up with a consistently-profitable trading plan based on indicators. But he'll have to reconcile himself to being late. That's unavoidable due to the nature of indicators and how they're calculated.

Congratulations on the popularity of your thread, by the way. It appears to be far more beneficial than the bought-this-sold-that type thread.

Db

 

[NVP]

Still relatively new to spread betting the indices, so please bear with me, I've seen a simple moving average example and wanted to run it past you guys.


MA with it set at 10, 30 and remove the 3rd line.

Been watching the FTSE for a few sessions and everytime the 10MA crosses above the 30 line, the SP rises. Everytime it dips below the 30MA line, the price drops.

Told you it was simple, maybe too simple. Please remember I'm starting from scratch (almost)

Any feedback/advice/observations or criticisms

Whatever gets you through the night N.....

.as time goes on you will realise you need to adapt and develop your ideas and seek out more advice and research....but there's nothing wrong in starting with some good ole fashioned ma,s

We all start somewhere ...and we all develop at our own pace

If you are running just a 2 ma system may be worth you experimenting with the multiple a little ....currently you are x3 On 10 vs 30

That may be a little too tight regarding a fast vs slow ma,,,,..but who am I to judge

N

 

[NVP]

No need to apologize. Just remember that the faster MA crosses the slower because price has risen or at minimum altered its downward trajectory. Ditto the reverse. Thus the crossover alone will either be a false signal or a late signal. Better to evaluate the price movement without aids.

Db[/

I agree with pa as the purist form of trading

let's just say the pure pa is for Jedi knights whereas indicators such as ma's can be usefully used by relatively inexperienced traders just as blasters are used by the storm troopers in Star Wars.....all part of evolution

N

 

[dbphoenix]

I wouldn't classify it as the Jedi level. If you can draw a straight line . . .

 

[Sonicscooter]

Probably.

 

[Splitlink]

I use MA's less and less, but I do, sometimes, use one to decide a trend. Once in the trade, though, I use an SLA to exit.