There was a trading strategy I saw somewhere (wish I could reference it here to give the author proper credit) that utilized a 5-period EMA applied to the Close and a 6-period EMA applied to the Open. I started playing around with these MAs and found that many big moves start not long after the two lines cross (with the trade in the direction of the 5 EMA).

Of course, this is nothing new and I'm sure people have been using this strategy either alone or as part of a more elaborate system. So I apologize if this is "old hat," but it's new to me and I'm intrigued by it.

My problem is filtering out the junk and narrowing down the proper entry and exit criteria. The ideal situation would be to trade right after the cross, but sometimes the lines will "tease" you and cross, then uncross and widen apart. What I've been doing is waiting until the current bar closes and putting in a trade on the open of the next bar, and basically doing the same for the exit (wait until they cross again, then close the position on the open of a new bar). This does work to some extent, but you leave some pips on the table when you trade that way.

I only use longer time periods (1-hour, 4-hour, 1-day), but I can see where this would work on shorter periods if you could better nail down the entry and exit.

I've tried adding other indicators to the mix, but nothing I've tried has been very helpful in distinguishing a good cross from a bad (temporary) cross. If anyone has any ideas, I'd love to hear them!

Rob