Replies to post #31122 on A.I.M. Users Bulletin Board (AIMUSERS)

[Bosco]

From the AI help manual (unfortunately, it does not mention what period of EMAs it uses).

MACRO: The Moving Average Cross Over (MACRO) filter was developed by Don Carlson in order to filter
inefficient trades. It uses two Exponential Moving Averages (EMA) to determine when to allow an update through
to the Automatic Investor Engine. When the EMAs cross, the current price will be sent to the Automatic Investor
Engine and a regular update will occur (i.e. Automatic Investor will use that price to determine whether a trade
www.automaticinvestor.com 63
recommendation should be given). When the EMAs don’t cross, the current price will be filtered and the Automatic
Investor Engine will not recommend a trade.
The MACRO filter has been exhaustively backtested on a variety of stocks over a variety of time periods and has
been shown to significantly increase returns while decreasing the number of inefficient trades. As such, it forms part
of the Automatic Investor DEFAULT model.

[Conrad]

I suppose Lost Cowboy hit the nail on the head on that one!

In this regards your two Ma's in TA would make a lot of sense! With a horizontal trading range one could get stuck with the TA-methodology to sell at a 10% price drop and then one will sell everything. Then at a 10% rice buy in again and the the price drops again 10%. . .you can see that such a strategy is a disaster. A short MA for the buying would prevent that.

That must be it.

One learns a bit every day.

In the years 2050 or so I will be the smartest man on earth.