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50/200 SMA crossover

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  #1  
Old 10-04-2009, 00:58
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Default 50/200 SMA crossover

Does anyone use the crossover of these two indicators to signal trades?

If you draw them on your charts you'll notice on just about every pair or indice that a 50SMA crossing below the 200SMA indicates a very strong bearish downtrend and vice versa. The 200SMA appears to be a good place for a stop loss and trailing a stop somewhere above the 50SMA should give decent results. Anyone see any problems in an approach like this?

Take a look at the USD/JPY for example. A bearish crossover occured on the 22nd of October last year. Catching it would have netted several hundred pips in the short run (500 at least). Using the SMA as a stop loss you would have been kept in the trade until early January in profit.

Now we can see a bullish crossover is about to occur on the same pair. Worth taking a long position?
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  #2  
Old 11-04-2009, 19:29
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Default

Quote:
Originally Posted by Raskolnikov View Post
Does anyone use the crossover of these two indicators to signal trades?

If you draw them on your charts you'll notice on just about every pair or indice that a 50SMA crossing below the 200SMA indicates a very strong bearish downtrend and vice versa. The 200SMA appears to be a good place for a stop loss and trailing a stop somewhere above the 50SMA should give decent results. Anyone see any problems in an approach like this?

Take a look at the USD/JPY for example. A bearish crossover occured on the 22nd of October last year. Catching it would have netted several hundred pips in the short run (500 at least). Using the SMA as a stop loss you would have been kept in the trade until early January in profit.

Now we can see a bullish crossover is about to occur on the same pair. Worth taking a long position?
On which time frame are you looking?
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  #3  
Old 17-05-2009, 17:03
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Default COOL!

Really happy to see this on the EMA's. Picked up this concept a couple weeks ago on another site (wish I could remember which one), applied them to my ashfxv2 charts and saw the same thing you did. I did not want to get too excited but they seem to be a really good trend indicator and useful for S/R also.

You seem to be a really bright guy so I'm very happy to have you initiate this conversation.

Everyone else, apply these EMA's to your charts and take a look.

BTW, I'm a noob too. Spent the last 3 months getting a wide overview of forex & now am ready to go back to the start to become absolutely fluent in the basics (MM, S/R, reading candles, etc.). It's really cool to have someone of your caliber on here to "grow up" with.

Thanks
mc

Wow, just went back to your original post. You are using SMA! I'll apply SMA to my charts & check it out. Do me a favor & check out the EMA on your end & let me know what you think. Also you can check out my posts from last night on the education forum and ashfxv2 forum to better see where I'm coming from if you want.

BTW, I have narrowed my focus to ashfxv2 as far as systems go. For any noobs who are searching, it's my opinion that there is simply no better place to start. The simplicity of the system and the time frame make it perfect for noobs, most of whom need to slow down and think clearly about what is happenning in the market and with the system. And to be able to catch 2,3,4 hundred + pip moves, WOW! Thanks Ash!

One BIG caveat, you MUST learn S/R (thanks Irathi) and money management as absolute requirements for this or any other system. And READ THE SYSTEM RULES on the very first post on ashfxv2 forum (download the PDF).

Last edited by 123mcmc; 17-05-2009 at 17:23. Reason: Obvious mistake
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  #4  
Old 18-05-2009, 02:37
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Yes, what TF are you looking at? If it is a daily, a crossover happens about twice a year :)
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  #5  
Old 18-05-2009, 14:47
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I think rask this is more suitable to catch long term moves
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  #6  
Old 20-05-2009, 01:31
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Default Cencored

Twice yearly, huh? That's the great kind of info a noob can pick up on this forum. I'm a computer noob & MT4 noob (spent the first couple months on another platform) so the furthest back I know how to go is where my mouse & the zoom function on the chart will take me. So, what about the value of the 50/200 relationship and direction (headed up or down) and proximity for indicating the strength of the trend. What about it;s value as support/resistance? If the crossover aspect is rare on the daily, what about lower timeframes? Finally, Is anyone looking at the EMA as opposed to the SMA? Haven't had time to apply SMA to my charts but will do it tomorrow. Raskolnikov, where are you?
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  #7  
Old 20-05-2009, 02:09
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Default SMA vs. EMA

Raskolnikov,

Just applied the SMA to Eur/ Aud. It's all I have time for now, gotta run! Looks like crossover happened about 7 days & 300 pips earlier w/ the EMA. What do you think?
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  #8  
Old 20-05-2009, 03:19
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Default OOPS!

Man do I feel stupid! Just got back for a quick look at the chart again. Last look was a 10 second glance before a mad dash out the door. Looks like cross happened @ exactly the same time but with the values of the indicators (obviously) at different levels. Sorry
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  #9  
Old 01-06-2009, 21:19
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Default Interesting...

I am going to check this out!
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  #10  
Old 01-06-2009, 23:24
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Default look good to me

look good to me, i m gonna try it......... thanks..
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