After optimizing my automated systems, sometimes my best MA
strategy has the the length of the first MA higher than the
2nd. (e.g. 47, 23) Another trader told me that my
strategy is upside down and that this isn't a good strategy. Anyone
have any knowledge about this?
I think with those types of MA's, the system will short the
rips, and buy the dips. It'll work well with false breaks and
choppy markets. I'm not too sure what would happen if the system
got caught on the wrong side of a trade. E.g., when will the MA's
cross back to give an exit? I would probably have a stop built in,
pivot, or another set of moving averages? Maybe somebody with more
experience can chime in?
Yes, that's exactly what it does. Like you said, moving
averages alone won't work like this: you need something else,
like pivots, but with the right combination of signals, it can work
very well in certain markets. In other markets it stinks,
but, then, that's the charm of investing.
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optimizing MAs question
Posted by deberah on 5th of Aug 2010 at 03:23 pm
After optimizing my automated systems, sometimes my best MA strategy has the the length of the first MA higher than the 2nd. (e.g. 47, 23) Another trader told me that my strategy is upside down and that this isn't a good strategy. Anyone have any knowledge about this?
Thanks! d
I think with those types
Posted by cw12 on 5th of Aug 2010 at 03:44 pm
I think with those types of MA's, the system will short the rips, and buy the dips. It'll work well with false breaks and choppy markets. I'm not too sure what would happen if the system got caught on the wrong side of a trade. E.g., when will the MA's cross back to give an exit? I would probably have a stop built in, pivot, or another set of moving averages? Maybe somebody with more experience can chime in?
Yes, that's exactly what it
Posted by algyros on 5th of Aug 2010 at 03:55 pm
Yes, that's exactly what it does. Like you said, moving averages alone won't work like this: you need something else, like pivots, but with the right combination of signals, it can work very well in certain markets. In other markets it stinks, but, then, that's the charm of investing.