Posted by: Babu Suresh | October 21, 2010

MA (Moving Average) Crossing

“No Trading Strategy can perform on its own and produce 100% results, it is entirely based on the user. The strategy is like a Light House, giving us direction and guidance to the destination”.

“A trader who works 70% on his self and 30% on his strategy, closes the day with positive results than the trader works the other way round”


Trading with Moving Average Crossing has perhaps been one of the most popular methods used by traders, especially Simple and Exponential Average Moving Averages Crossing.

I wish to share with you why I use MA crossings and how I use them in my trading strategy.

A normal approach to MA crossing always leads to substantial failures, while if you take time to study the beauty of this system, you will find why it is such a wonderful system if properly used. Needless to say, it is always recommended to use RSI & MACD before deciding to go for a trade on MA Crossings as they nicely complement with each other.

Understanding the distance between MAs, be it SMAs or EMAs, is very much important before entering a trade. There are instances when all the MAs can be found way apart from each other, this is the stage to avoid any trades; while there are times when they are respectably closer to each other. The best time to go for a trade is when all the MAs converge at one point. Since SMA is  lagging in nature, the entry signal may be delayed.

I am a Day Trader.

My trading strategy is based on MAs crossings. I use 3 charts and I use 4 different MAs in each of these charts.

Also, I use RSI & MACD to measure the strengths and weaknesses of the price movement.

I trade the following Futures Instrument:

1. TF (Mini-Russell 2000 Index) (PitBull-1)

2. CL (Crude Oil) (PitBull-2)

My entry strategies:

I follow 2 Trend following strategies:

1. Long Bull Strategy

2. Short Bull Strategy

1. My trading entries are based on 15 Sec. chart while I use 6 Range and 2 Min. to know the direction of the Price.

2. I enter a trade only when all 4 MAs in 15 Sec. chart converge at one point.

3. There are times when MAs in both 6 Range and 15 Sec. charts converge at one point, this is perhaps the best time to aim for larger ticks.

4. If for any reasons I miss a trade, I keep quiet and watch until I get another chance, never chase the price.

5. I also use Pivot and Weekly Fib. levels for supports and resistances.

6. I avoid sideways market, avoid News time trading.

My Exit Strategy:

I look for 6 to 10 ticks per trade.

My Daily Target:

30 to 40 Ticks

In my next articles, I will further elaborate how I use MA crossings with illustrations.

Healthy And Wealthy Trading


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