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

Just my two penneth, I think you are always going to get crossing momentarilly using MA, the only solution is to widen the parameters but then you miss the 10-20 pip moves, seems to be a dilemma you are stuck with unless to use something other than MA

2 x Decema lines at 45,0 & 45 on 4H,1 gives as good as you might get, but you still will get small crossover but less of them

Hello Rob,

I had posted simple stratergy which works on 5min chart
here is the link. if you observe this setup for some time you will wonder how price react to this setup.

Best MA Cross Indicator w/Alerts?

setup
Below is my Setup. you can try it.
Setup.
Chart 5Min Chart. with following Simple Moving Average.
SMA 2400 Close Represent 4Hr Timeframe Res/Sup
SMA 600 Close Represent 1Hr Timeframe Res/Sup
SMA 300 Close Represent 30Min Timeframe Res/Sup
SMA 150 Close Represent 15Min Timeframe Res/Sup
SMA 50 Close Represent 5Min Timeframe Res/Sup
SMA 5 Close Represent Current direction.

observe price patern.
in addition you can use Daily pivotes points. and 4Hr pivote points.
Observe how price react after touching SMA.
Use SMA as suport and resistance... Same setup works with 1Min Chart.

Happy trading
Ramdas

Here is latest chart of eur/usd. obseve how price move between sma.
if anyone interested i can post my observations and rules.

Happy Trading
Ramdas

Attached Images

eur usd.gif (11.3 KB, 1657 views)

Can you post your rules? Also, how successful is it [not backtesting]?

Increase... I'm sorry, but could you clarify what you meant here for a newbie? What are Decema lines? 45, 0 & 45? I feel stupid even asking what you mean.

Ramdas... I can see that the 600 and 2400 SMAs acts as something of resistance and support lines, but it looks to me like it would be tough to set S/L and T/P based on them. I would love to see your rules and how you use these SMAs in your trades.

Thanks, the chanllenge I see is cross upon cross upon cross, not clearly defined moves during trading, but if you can wait for the nice line up of the SMA it would be good trades

Dear increase.

I have attached current chart with explanation.
in this setup only important thing is price pattren.
just observe price patern.
i do not consider crosses since cross fromation is delayed

Happy Trading
Ramdas

Attached Images

eur usd 01.gif (21.4 KB, 1592 views)

Also there is another important point regarding Cross currency.
we have to also take in to consideration what is happening to counter pair.
if say E/U rise reached some resistance point then U/C will stop falling.
i look at four main pair..U/J, U/C, E/U and G/U and spot price pattern SMA S/R on each pair. since when one pair reach important sma res say sma2400 and stop there, then other pair will stop falling..and may not touch nearest sma support.

Happy trading
Ramdas

Oh ok so what do you apply your SMA to typical price ?