TREND FOLLOWING: LONG SETUP: 1. PRICE ABOVE 200D MA; 2. 18 MA CROSS FROM BELOW 40D MA; 3. PRICE CROSSES FROM ABOVE THE 18D MA; 4. ENTER LONG WHEN PRICE CLOSE ABOVE 18D MA. 5. EXIT WITH CLOSE BELOW 40D MA.
REVERSE PROCESS FOR SHORTS.
WHAT DO YOU THINK?
Comments
ct586283
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I like simple trend signals. I especially like hourly trends. But I am trying to understand...after step 2. where the 18MA crosses the 40D MA, the prices are all well above the 18D MA so why did you wait until the price dropped back down to touch the 18 D MA before going long? So continuing, you later exit at 5. but when would you get back IN to the trade for another LONG? You would presumably be waiting until the 18DMA crosses again and then the price bars would have to do what? touch the 18 D MA line again? Maybe show the next series of "ins" and "outs" or maybe I am misunderstanding something. Thanks.
steveoliveira
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I'll try to make it simpler:
1. The 200 Day is your trend marker, which means if above you only can go long and below you can only go short.
2. IF 18 is above 40 then you are looking for long trades and vice versa for shorts.
3. When looking for long trades, you need to wait for the price to cross the 18MA from above, and you only enter when price crosses again from below the 18MA. This rule helps you avoid the whipsaws that are so common in the moving averages systems.
4. You place the stop below 40 MA.