cdeeley, I will confess that I'm not as keen as I once was about revealing every detail of what I do. I will say I believe the most reliable truth of price is revealed through the integrated configuration of all moving averages--first understanding each moving average from the perspective of the law of price and then deciding what the integrated pattern might mean.
NOTE: Deva mentioned the other day that she hesitates to examine moving averages because Hurst believed they are lagging indicators. Well it really depends on what you're looking for and which moving averages you're examining. I have found a way of tracking and tracing prices through moving averages that is as exact as we are likely to find in the crazy world of price with its contradictory forces.
Science operates on the idea of degrees of certainty, and so we never know absolutely what price will do. Clearly, however, certain configurations deliver much higher probabilities than others.
So if you want to see outsized success, trade only what you know (high probability) and sell what you don't know (low probability).
So the highest probability long trades are where price is above the 200, 50, 20, and 10 ma's--especially where you catch price when it is just launching or just after back-testing these ma's. These ma's are lines in the sand that give clear GO or NO-GO signals in the event of a false signal. These ma's are simply popular, generally accepted ones. My method works with any set of ma's--any at all--but a wide range does seem important to me.
In the case where price is likely to cross above the 10-dma and the 20-dma, you can anticipate the cross and get in using a 5-dma and a 7-dma. There are also cases where price is below the 50-dma but ready to cross above the 10-dma and 20-dma, and these can make excellent trades--and once again you can use any combination of signals to guide the trade for an early entry. Then a cross above the 10-dma and the 20-dma become confirming signals--or NO-GO signals in the event of a false start. In the event of a trade beginning below the 50-day, you will generally anticipate resistance at the 50-dma--unless the cycles and all other information suggest price can and will cross above the 50-dma--when the 50-dma is flattening and ready to turn up. So in early March, I saw this was a high probability.
I'm in the process of launching a corporation, and so have decided to be a little more private concerning my methods. At the same time, one purpose of my business will be to encourage science-based analysis and the ruthless rejection of methods achieving 40 to 60 percent accuracy rates. The only way to move this field forward is to know what we really can know and to place all other information in the Iffy Clues pile. This requires keen, clean analysis over a period of years. The more organizations that pop up trading according to science-based signals, the stronger, the more robust, and the more resilient the entire market will become.
Hope this gives you the clues you need!
Ted
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