sandpiper
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dazzam,
A 20 period exponential moving average is one of the more popular ones used on intraday time frames and is the basis for a number of entry methods.
If you are trading using an intraday time-frame, multiple moving averages are also often used to indicate the "trend" in a longer time frame (much as Skimbleshanks has shown on the longer term charts above).
So, many people who use a 20 period EMA on a 5 minute chart also incude a 60 period EMA on the same chart (which roughly equates to using a 20 period EMA on a 15 minute chart).
In this way you can get a view on where the trend is in the 15 minute timeframe whilst actually trading the 5 minute charts (maybe making sure you were always trading in that direction).
Whilst, I don't know of many traders using moving average cross-overs for trade entry these days, there are many that use moving averages in some other way.
With regard to timeframes, a common approach with a number of US traders (haven't come across it to much here) is to divide the trading session into equal slices, so instead of looking at, say, 60 minute charts, a lot of US traders use 65 minutes (since this divides exactly into the 390 minutes of the nyse/dow trading sessions. Personally, I've always found this approach more useful on the futures, but, nevertheless, a 65, 130 or 195 minute chart of the DOW does give a "slightly" different perspective.
To illustrate further, perhaps you could try an 85 minute chart on the ftse?
Anyway, just some ideas. Good luck.
A 20 period exponential moving average is one of the more popular ones used on intraday time frames and is the basis for a number of entry methods.
If you are trading using an intraday time-frame, multiple moving averages are also often used to indicate the "trend" in a longer time frame (much as Skimbleshanks has shown on the longer term charts above).
So, many people who use a 20 period EMA on a 5 minute chart also incude a 60 period EMA on the same chart (which roughly equates to using a 20 period EMA on a 15 minute chart).
In this way you can get a view on where the trend is in the 15 minute timeframe whilst actually trading the 5 minute charts (maybe making sure you were always trading in that direction).
Whilst, I don't know of many traders using moving average cross-overs for trade entry these days, there are many that use moving averages in some other way.
With regard to timeframes, a common approach with a number of US traders (haven't come across it to much here) is to divide the trading session into equal slices, so instead of looking at, say, 60 minute charts, a lot of US traders use 65 minutes (since this divides exactly into the 390 minutes of the nyse/dow trading sessions. Personally, I've always found this approach more useful on the futures, but, nevertheless, a 65, 130 or 195 minute chart of the DOW does give a "slightly" different perspective.
To illustrate further, perhaps you could try an 85 minute chart on the ftse?
Anyway, just some ideas. Good luck.
Last edited:
Sandp-
As u say, lots of people use Mas in some form, although probably not the crossover-
I think the problem is when the price gets choppy, u get chopped as well- that is where u need additional skills to be able to somehow identify the congestion- any ideas here ??
cheeers
As u say, lots of people use Mas in some form, although probably not the crossover-
I think the problem is when the price gets choppy, u get chopped as well- that is where u need additional skills to be able to somehow identify the congestion- any ideas here ??
cheeers
sandpiper
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al-motor,
Yes, you're right about the chop, particularly if you use cross-overs. As has been mentioned previously, the best indicator of congestion is price. A bit of practice and eventually you get the hang of identfying the various types of congestion or consolidation pattern, i.e wedges, flags, ledges.
If you are not happy just using price (I used to feel I had to use indicators since I was paying for a fancy charting package.......) then the one I have seen used the most is Wilders ADX.
Rather than using ADX cross-overs for identifying entries, a few people such as Conners, Bradford Raschke, Lo, use it for identfying the type of market "phase" that you are currently in, whether trending or non-trending.
Street Smarts by Connors and Raschke has some very useful stuff on ADX and a method called "Holy Grail" that uses a 20 period ema and ADX together. Theresa Lo's website may still have free articles on the use of ADX this way but I suspect it's all subscription based now.
If you can't find anything on the web discussing the use of ADX in this context then try and pick up a copy of the book second hand. It's a bit pricey if you try and pick it up new. I happen to think it's worth it, but I can see why a lot of people don't.
Yes, you're right about the chop, particularly if you use cross-overs. As has been mentioned previously, the best indicator of congestion is price. A bit of practice and eventually you get the hang of identfying the various types of congestion or consolidation pattern, i.e wedges, flags, ledges.
If you are not happy just using price (I used to feel I had to use indicators since I was paying for a fancy charting package.......) then the one I have seen used the most is Wilders ADX.
Rather than using ADX cross-overs for identifying entries, a few people such as Conners, Bradford Raschke, Lo, use it for identfying the type of market "phase" that you are currently in, whether trending or non-trending.
Street Smarts by Connors and Raschke has some very useful stuff on ADX and a method called "Holy Grail" that uses a 20 period ema and ADX together. Theresa Lo's website may still have free articles on the use of ADX this way but I suspect it's all subscription based now.
If you can't find anything on the web discussing the use of ADX in this context then try and pick up a copy of the book second hand. It's a bit pricey if you try and pick it up new. I happen to think it's worth it, but I can see why a lot of people don't.
sandpiper
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al-motor,
tried to set up a chart but the realtick version of ADX isn't quite right. As I mentioned, Connors and Bradford Raschke have two slants on ADX. The first one uses a retrace of price to the 20ema on a daily chart for entries, but only when the ADX is at the 30 level and rising (rising should indicate trending). They also have statistical anaylsis of historical levels of ADX across most commodities markets, e.g. the S&P has an ADX value of between 30 and 39 for 17 percent of the time (daily timeframe, 14 period ADX).
If you want more info you might find it on the www.mrci.com website as well, or in one of Bradford Raschke's free ariticles on her website. (lbrgroup.com). You have to register, but it's free and I haven't received any spam from them in the years I've been registered).
From what I can remember, Theresa Lo suggests that when ADX rises to certain levels it's a good time time to exit as you can expect consolidation to follow. Can't remember what the level she uses is. Someone else might be able to help on that one. Here website is trendvue.com.
Happy hunting.
tried to set up a chart but the realtick version of ADX isn't quite right. As I mentioned, Connors and Bradford Raschke have two slants on ADX. The first one uses a retrace of price to the 20ema on a daily chart for entries, but only when the ADX is at the 30 level and rising (rising should indicate trending). They also have statistical anaylsis of historical levels of ADX across most commodities markets, e.g. the S&P has an ADX value of between 30 and 39 for 17 percent of the time (daily timeframe, 14 period ADX).
If you want more info you might find it on the www.mrci.com website as well, or in one of Bradford Raschke's free ariticles on her website. (lbrgroup.com). You have to register, but it's free and I haven't received any spam from them in the years I've been registered).
From what I can remember, Theresa Lo suggests that when ADX rises to certain levels it's a good time time to exit as you can expect consolidation to follow. Can't remember what the level she uses is. Someone else might be able to help on that one. Here website is trendvue.com.
Happy hunting.
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