exactly and as I've covered before, when I extensively tested
moving average cross strategies many years ago, in almost al cases
whenever the fast MA crossed the slow, you got a pullback (if long)
or bounce (if short). Also, almost 50% of the crosses were
whipsaws! Meaning a cross then reversal and the fast MA ended up
crossing back down, this occurred about 50% of the time. So,
whenever the MA's cross you can expect either a whispaw, or a
pullback. Now, what improved the MA cross strategies is if I
incorporated a whipsaw confirmation where price needed to take out
the high of the candle from the day of the MA cross on a closing
basis, or the low of the candle for a bear cross - this cut out
almost 1/2 of the whipsaws. I've made many posts about this
in the past, I'll dig one of those up and post it as some of those
show actual statistics
I just hope no one
Posted by steve on 24th of Feb 2023 at 09:25 am
I just hope no one bought that Golden Cross - down 250 since
exactly and as I've covered
Posted by matt on 24th of Feb 2023 at 09:32 am
exactly and as I've covered before, when I extensively tested moving average cross strategies many years ago, in almost al cases whenever the fast MA crossed the slow, you got a pullback (if long) or bounce (if short). Also, almost 50% of the crosses were whipsaws! Meaning a cross then reversal and the fast MA ended up crossing back down, this occurred about 50% of the time. So, whenever the MA's cross you can expect either a whispaw, or a pullback. Now, what improved the MA cross strategies is if I incorporated a whipsaw confirmation where price needed to take out the high of the candle from the day of the MA cross on a closing basis, or the low of the candle for a bear cross - this cut out almost 1/2 of the whipsaws. I've made many posts about this in the past, I'll dig one of those up and post it as some of those show actual statistics
case in point here's two sets
Posted by matt on 24th of Feb 2023 at 09:35 am
case in point
here's two sets of statistics, 1 shows the 50/200 cross with and without the confirming candle
Confirming candle: Profit factor of 8 and 70% winning trades
Non comfirming candle: Profit factor of 5.5 and 43.7% winning trades
Would be interesting to see
Posted by crossharry on 24th of Feb 2023 at 10:10 am
Would be interesting to see those stats updated for the past few years :)
here's one of those past
Posted by matt on 24th of Feb 2023 at 09:33 am
here's one of those past posts where I go into great detail on the MA crosses, actually this is a repost of a very old post
https://breakpointtrades.com/blog/post/222959/
It's not a buy/sell signal.
Posted by brophy on 24th of Feb 2023 at 09:32 am
It's not a buy/sell signal.