The Truth About MA---Why I hate MA Crossing - page 3

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abgcompu:
Ok

I know a lot of you are using the most popular indicator in the Market (Moving Average). What you do not realize is that is that MA is the #1 loser in the market.

Don't get me wrong, all indicators are loser, but MA is the leader.

I have been trading forex for over 10 years now and I am MQL coder. I know a something about forex and indicators.

I have created one of the most sophisticated indicators in the Market, but I am not here to talk about that. I am here to have fun and bash indicators and maybe help some people.

Here is the bottom line.

Indicators are not really the problem. It is the instruction that comes with them that is the problem.

Let's take for example MA.

This is by far the most abused indicator in the world. It has lost so much money it should have been illegal to use it. Incidentally, no one seems to realize that.

Most trading system in the market follows the wisdom of the MA crossing strategy. 90% of trading system has some type of MA crossing scheme in it. Most EA are build around that concept. That is why all EA (automated trading system) in general are garbage. Yes, I said it. They are all garbage.

I am a programmer and I have programmed dozens of them for clients. You tell me your great ideas and I will turn it into an EA for you. You get it with a disclaimer that it will blow your account at some point if you do not supervise it. That�s my job. The issue is they will never listen to reasons. They think of something, they want an EA for it. So I give it to them.

Having said all that, where do a wanna forex trader should turn for help? The truth is there no one that can help you because the answer would be too simple for you to accept and follow.

For example:

I trade against everything that I have learned in forex trading classes. I trade against everything the books, the technical gurus, the TV, the market analysis, the news, even the TREND. Yes, I trade against the trend. So when I talk about trading most traders will stay away from what I am saying because it makes no sense to them.

Since here in this thread I do not care too much about who is reading this, I am going to share what I do and get some stones and mud thrown at me in the process.

It should be fun to watch and read the comments I will be getting.

So sit back and relax as I am going to unleash my sac of garbage.

Here is how I trade.

I only Buy Low and Sell High using my naked eye and simple indicators. I use MA contrary to the way they are designed to be used. I DO NOT USE MA CROSSING. IT IS DUMB TO USE MA CROSSING.

Bellow is a summary of what I do to prepare for a trade:

1.I look at a chart in a Daily Time Frame. I am not too concern about all these technical analysis. They are too confusing and too boring for me to be wasting my time on. As you may already know, most of your trades are always ending up in the wrong side. So the forex market itself does not follow technical analysis when it comes to taking my money so why should I?

2. I determine the intermediate term trend with the Daily and 4H and the long term with the W1 and MN. This is easy to do with your naked eye. No need for expensive indicator. If you are addicted to indicators then do like the other idiots are doing. Drop a 200 EMA on your charts and say to yourself if the price is above the 200 EMA, the trend is up and if the price is below it the trend is down.

3. I looked at where the price is located in relation the highest point in the chart and the lowest point. By this I am referring to the true support and the true resistance level. Or for new guy, this means the highest the price has been before returning back down and the lowest the price has been before returning back up. You can do all this with your naked eye.

4. I am waiting, waiting, waiting for the price to reach my level.

5. I do not trade 5M 30M to trade. Only slaves and people who are working on their next heart attack would want to scalp.

6. I use good judgments and only risk less than $2 per pips on my trade.

7. I follow my stop loss rules and let life goes on.

Later one today, I will post some pictures to show what I am talking about and what I consider a good entry point.

I will also show you the right way, in my opinion, to use MA and why you should never use MA crossing in any way shape pr form.

Completely agree with with you said.I also don,t use indicators at all and trade using pure price action.Indicators are all based on what price had done in the past then we should take off all the confusing garbage from our charts and start reading the pure market nature which is raw price.

 

can't really agree - the good folks here at FX TSD have made tons of indicators that can actually lead alot of price action - esp if used for over the various TFs - but depends on how they are used and set up

and there is nothing wrong with joining in a confirmed up or downtrend safely as you know 70-80% of the time what the trend then is

its what a lot of Algo's do

trading pure price action is the fastest way to the poor house (for most)

MAs crosses are not so naff either - try them on modeling software and see how many good vs bad trades they make

they win more than loose

but would be better on an EA - as some losses could put one off manual trading, just before they nail a few very good runs

everything has its place in life - Price action, indicators and the MAs

 

Interesting name of the thread. I always have thought that things like "hate", "love", "adore" or similar have nothing to do with trading. Once when feelings crawl into trading that is not trading any more.

PS: price action trading is also based on what price have done in the past (just take a look at a simple trend line - would it be possible to draw it or find a "trend" without past prices). Trading is always based on past prices. If I knew the future prices I would be god

 

long time i use ma but it is not possible only use ma,it work fine long time frame,i use it only identify current trend.

 

It is really curious, how easily people get of balance falling from one extreme point of view to another.

What i mean is, first newbies often think "indicators" are great, then he doesn't make money and start "hating" indicators.

Now he thinks "naked trading" or nowdays so called "price action" (aka candlestick trading) is the new holy grail.

My experience is that this kind of thinking cripples the mind ;-), each type of trading has pros and cons.

What do you think, who has a wider overview, the trader who learned to use 1 strategy, or the one who mastered 3 or more with succsess?

I have 3 points what i want to mention here.

1. just because one or some "indicators*" dont make Money for you doesnt mean they are crap.

indicators are tools. Like every tool they must be used right, or at least the user must know what to achieve with his tool!* There are alot of indicators invented, sticking all in one group without understanding them nor used them correct,

is just too easy.

2. even Candlesticks are "indicators" when you think about the core idea of indicators.

They are made to do one or both of to task: Visualise Data for fast eyeballing analysis, and second they calculate FOR YOU.

3. You must understand that, what makes you money is a strategy that might work. One or more indicators can be part of it.

Your job is to build and or test a strategy.

Yes Ma Cross is inefficent, but does this mean moving averages are crap? damn no.

Depending on your goal try something else. Example, use one MA which is crsossed be the actual price.

Its faster, but not a hole strategy.

 
trade-or-die:
It is really curious, how easily people get of balance falling from one extreme point of view to another.

What i mean is, first newbies often think "indicators" are great, then he doesn't make money and start "hating" indicators.

Now he thinks "naked trading" or nowdays so called "price action" (aka candlestick trading) is the new holy grail.

My experience is that this kind of thinking cripples the mind ;-), each type of trading has pros and cons.

What do you think, who has a wider overview, the trader who learned to use 1 strategy, or the one who mastered 3 or more with succsess?

I have 3 points what i want to mention here.

1. just because one or some "indicators*" dont make Money for you doesnt mean they are crap.

indicators are tools. Like every tool they must be used right, or at least the user must know what to achieve with his tool!* There are alot of indicators invented, sticking all in one group without understanding them nor used them correct,

is just too easy.

2. even Candlesticks are "indicators" when you think about the core idea of indicators.

They are made to do one or both of to task: Visualise Data for fast eyeballing analysis, and second they calculate FOR YOU.

3. You must understand that, what makes you money is a strategy that might work. One or more indicators can be part of it.

Your job is to build and or test a strategy.

Yes Ma Cross is inefficent, but does this mean moving averages are crap? damn no.

Depending on your goal try something else. Example, use one MA which is crsossed be the actual price.

Its faster, but not a hole strategy.

Some good points there

People tend to forget that trading is trading, not "use one or two indicators" or "price action". And testing and understanding is a definite no,no to a lot of people : no time to waste to become rich probably

 

SMA 200 and a price breaking it. Daily chart. One of the basic ways of how brokers trade the trend

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