rulesbasedtrader

rulesbasedtrader

As in life, the questions you ask will determine the answers you get when it comes to trading. We live in an age of "instantism" - we have been conditioned to believe that faster is better – faster price executions, faster trading, faster feedback, faster news, faster food, faster everything! And this need for speed has been translated into trading. I know whereof...

rulesbasedtrader

We know for a fact that moving averages of closing prices are notoriously inaccurate. My variation on the moving average concept, which uses eight SMA close versus eight SMA open is, in my opinion, a better way to go. Here is the six-hour chart of S&P futures showing signal turns in the eight OC "relationship. No, it's not perfect by a long shot but it does have...

rulesbasedtrader

We all know that moving averages, in particular, moving averages of closing prices tend to be highly inaccurate indicators and frequently miss major tops and bottoms. In backtesting, they tend to be accurate some 30 to 40% of the time which is to my way of thinking unacceptable. On the contrary moving averages of opens versus closes for highs versus lows, when...

rulesbasedtrader

One of my favorite indicators for short-term trading as well as longer-term investing is the 8 open/close relationship. As I have explained it in previous postings the concept and the coding are incredibly simple. We are looking at two moving averages eight SMA close versus eight SMA open. The concept makes sense logically because in a rising market there is...

rulesbasedtrader

It's easy for a timing indicator or a market forecaster to look good in a trending market. As long as the trend remains bullish with low volatility virtually any timing indicator will be bullish and appear to be valid. The same holds true of down-trending markets. We all know that to be true. The real significance of any indicator or forecasting methodology is...

rulesbasedtrader

Thank you to those who have responded so kindly and favorably to my postings on the JB 80C indicator that I developed (quite some time ago). The JB 8OC indicator is based on a simple but powerful concept. Specifically, in bull markets no matter what the timeframe, closing prices of a given time bar tend to be higher than opening prices. In a bear market closing...

rulesbasedtrader

Platinum prices surged higher today as did all precious metals. My weekly 8oc indicator triggered a buy signal last week when the 8MA close ended the week above the 8MA open. Signals are only valid at the end of each price bar because they can move back and forth during the price bar but that would not be indicative of a change in trend until the bar is over....

rulesbasedtrader

For many years traders have had a love-hate relationship with closing based moving averages. Such crossovers tend to be extremely inaccurate, frequently getting whipsawed and achieving low profits. This approach tends to be more stable particularly in longer time frames. Of course it also requires a stop, profit target, and profit maximizing strategy. If this...

rulesbasedtrader

For many years traders have used moving averages of closing prices to trigger trend changes. Historically crossovers such as the 50 day/200 day methodology are extremely inaccurate and tend to be late in picking tops and bottoms. I find that a more fruitful approach is to compare averages of closing prices versus moving averages of opening prices. Of course this...