Moving Average Crossover Secrets (The Truth Nobody Tells You)
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- เผยแพร่เมื่อ 28 มิ.ย. 2024
- The Moving Average Crossover is one of the first strategies I’ve traded.
If you’re not familiar with it, here’s how it works…
You buy when the “fast” Moving Average crosses above the “slow” Moving Average (and sell when it crosses below it).
Anyway, I made money when the market is trending strongly.
But in a range market, it killed me.
So, I concluded the Moving Average Crossover doesn’t work.
But as my trading mature, I looked back and asked myself…
“Why didn’t it work?”
I did some research and that’s when I realized I was doing it all WRONG.
And I reveal my findings in today's video, so go watch it right now...
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#movingaveragecrossover #ma #moving average
Love when you mentioned breakouts during less volatility. Im paper trading futures and have found doing this has given me great success in very short periods of time with very small contract sizes using 9 and 20 EMA and 50 and 200 ema as well. Great video!
Honestly the best explanation about curve fitting that I found, simple and easy to understand!
This point about trading more markets vs a few applies to trading in general and not just MA crossover imo. Because it's actually what you call the law of large numbers. For your edge to play out, you need the volume of trades
I really like your logic and enjoy listening to your practical but intuitive trading knowledge.👍🏾
Great video man, really easy to understand. Look forward to your videos in the past and future!
Nice one Rayner, clear and understood. One Q I do have - concept and application considered - is whether exponential MAs work better than simple? Is that not something to consider in all of this?
Thanks, you just cleared my 12 months loosing reasons. I was just focusing on MA crossover
Great video! ✌🏻🖤
20 and 50 can be used for short term , like intraday
Super explanation!!
Do you have a video on your favourite day trading strategies and favourite moving crossover strategy for day trading?
Very good learnings as always thanks Brother🙏 ❤
Hey Rayner I am a big fan of yours. You share great tactics that really worked for me. Thanks for me. Now I have a question to ask you. What time frame should anybody use for trading ?
Fantastic. Please let me know what is best time frame to choose standard
great advice!!
An interesting aspect, Rayner.
Just a few things that ignite my curiosity.
1. Initial buy signals with EMA/MA crossover strategy are often very timely. However, that's not the case with the sell signals, that often come delayed. Do you suggest making a hybrid that buys on EMA/MA crossovers and sells on oscillators crossing down overbought regions?
2. Although you specifically asked to focus on the concept and not the parameters, I'll still ask for your opinion on parameter optimization. Is there a quick method to backtest the data in such a way that it produces the best crossover parameters, and not just generic golden crossover (50,200) results. I'd like to know the best-performing crossover from my backtest period (let's say 30 EMA crosses over 121).
Thank you for your knowledge! I appreciate it as I'm starting out trying the EMAs cross overs noticed it doesn't work on ranged markets so needed this information to understand better MAs
13/48 strategy?
Thank you Rayner
This definitely helped with my psychology on how to formulate a trading strategy and adjust it. Before I was like "fuck are my parameters optimal?" Now think about why my trading strategy isn't working and what can I do to prevent it from happening in the future.
Hello Rayner “crossing-over-to-the-light-side” Teo
Nice Video :) On which timeframe do you made the tests? daily?
thanks for video sir, can you explain how you made the spreadsheet with historical data at 4:23?
thanks in advance !
Great stuff. The first time I saw your face didn't think much of a young dude but after having watched a number of your videos, and being able to compare yours to others, I must say you articulate your teachings clearly in a way that we can use straightaway. Thanks.
straight forward guy.....it is good thing that save time
🚀❤️🙏👍💯great summarized and well explained
Hi Rayner. Would you look to get back in the same market if the atr reversed another 3atr to the upside and the same moving averages were crossed up and if so, would you look for the same 3atr exit strategy. Or would that market be done with. Cheers. Ash
hi your teaching are superb, do you have any idea about DMI indicator strategy?????
Hello sir, I want to know how to avoid fake signal and confirm trade signal that now on this signal movement can occur please guide which tool we can use to solve this problem
Thanks for this Rayner... Now, I know....
Moving averages are trendlines. Remember that short term trend is in phase with the long term trend when 50 & 200 are in phase
Hi Sir, I expected that you will show multiple graphs with cross overs. When it will fail and when it can successful.
thank you for the great content!
Is it possible to share the Excel file which is shown in the video
(still learning) As far as managing the stop-loss. If the market is moving against your position and closing in on your stop loss, do you still adjust your stop loss? Or do you leave it where it is and let the market close out your position? Also, do you keep your positions open through weekends as well?
"If the market is moving against your position" , NEVER move your stop loss lower. If the stock rallies, you buy back in. That's from SMB capital. A small gain is better than any loss. Moving your stop loss is a sign of the desire to not be wrong. "no, I'm not wrong. I just miscalculated by a few cents". Hope this helps!
A question. When you say short, what do you buy when you short the index fund when the 50 ma crosses below?
The most relaxed forex trading
Hi Rayner! Could you explain the reason why we should use this strategy trading in more different markets, instead of more different stocks of different industries?
Thanks!
Very good
Were you using the exponential moving average or smooth?
Profits would be higher if your entry price is closer to MA. Enter few candles before or after the cross.
Just noticed you cross your 7s, I do too :)
Fabulous !
What i would like to know is how do you know that the best time to enter the S&P 500 is in the last week of the December 2018 (as per the chart you showed). That seems to be a better entry point than when the MA 50 cross over.
hello if want his paid courses i can give it for a lower price
Thanks Rayner Teo for ur this golden video, Can u please make video about simple scalping strategy?
hey i just wanna say i ready to give you his paid courses for lower price
@@abdo_xau How I don't want to buy any paid course I know two scalping strategy but I wanted to know how he would make scalping to improve my scalping strategy.
Hello sir, can we use this setup on small time frame like 5 min or it is for long time frame only
Rayner, surely the worthwhile comparison is to compare the MA strategy to a simple buy and hold. The question is then, whether MA beats buy and hold for dollars earned?
He explained that the annual returns beat the overall market average.
14% is pretty accurate that is about how much I make. I don't use this exact strategy but similar concept.
You could make 1% more by dumping your trading bankroll in ETFs and forgetting about it. 14% annual return is not even worth the risk and stress that comes with trading, anything less than 30% is not worthwhile.
hey hey rayner...thanks
Thanks for the video.
How do you do the backtesting, is it a software or some paid service?
Hope you can answer the question :)
Hey BO Love Rayner Teo Teachings, From my understanding you simply pick a chart of interest. Example. Forex Market - EUR-USD, GBP-USD or Cryptocurrency BIT-USD, ETH-USD So whatever chart you are using and you should check out other charts as well. GO back in time on a chart and apply your favorite Indicator or Indicators and see what the results are. So lets say we pick Bitcoin on the 1 hour chart and we apply the Ichimoku Kinko Hyo Trending indicator and MACD as an Oscillator. This is just an Example and these indicators will be the only indicators on our chart. We can now Scroll back in time on the 1 hour or a 4 hour chart and see what is happening. Are these 2 Indicators showing us high Probability Trades, first we need to know how these indicators work and we need to find out if they work together and backtesting will show us. Backtesting means we go back to 2014 for example apply our indicators and travel forward in our charts and watch. we may even need to add an additional indicator as well such as a 20,50,200 moving indicator. So to sum it up go back in time on a chart of your interest and apply Indicators to the chart and see how many times the results are working in your favor for an uptrend or down trend or sideways channel. By back testing you may find a Day Trading Setup on the 5 minute chart that gives you 85% Success Ratio or a Swing Trading Setup. Its time consuming The real test comes when you trade your setup in real time. Try to do your backtesting on a lower timeframe 1,5 minute if you are a potentional Day Trader or higher timeframe 1,4,daily if you thing you want to swing trade Hope this helps
Hi reyner,
Can you introduce some applications,that help us for backtesting?
Thanks
Really great clip, Reyner.
Changing TF considered changing parameter?
For example, stick to same TF with different market!
Hey Rayner. I don't want to sound like I want to be spoon fed but I really understand this "moving average strategies" more than everything since my still new in FOREX world. So my question is, is it a wise move to trade using moving averages only and master them???
Willem Bors it takes time to master this. But soon u will get to know the art by sometime on your own. I recommend you to have currency heatwave, trading view premium, hot pairs application, Bloomberg.
Never use signal services if your a newbie, all those are fake to diversify their income without any risk.
Happy trading
God Bless
Thanks
Study was done and it turns out the exponential moving averages work very well and 13 and 48.5 day moving averages were more potent than the 50 and 200. I backtested this strategy as well and if applied to trending markets it is a winning strategy.
Can you share the spreadsheet, I think that would help with the level of understanding of profitability or not and try to see what a trader is doing wrong with their particular concepts?
Bro please share this Excell sheet.....I want to check...thank you
Rayner, what do you think about custom MA Indicator ?
Rayner, thank you so much for explaining everything very clearly. I understood the concept except one question about Trailing Stop-Loss based on MA...
Is there a way to place an order for Trailing Stop-Loss that follows MA on the Trading App or we have to manually move our Trailing Stop-Loss everyday as the price moves up & down? Could you please explain?
You can get an algo to trail stop
Simply love your drum roll! ttttrrrrrrrrrrrr.....
hello if want his paid courses i can give it for a lower price
what you mean with secret 2 and 1, MA works well when you trade many different markets
Pair this with the KAMA moving average, and I think this is a solid and simple strategy. The KAMA is designed to adjust itself based on volatility. It really does a good job of not crossing over in ranged markets. I personally think the 50 KAMA and 200 KAMA on the 4H is a good combination.
By what percentage the 50 DMA should crossover the 200 DMA for it to confirm it to be a golden cross?
Hey Rayner! I hope all is well with you and yours. Thanks for this video.
Question; I had a stock that never touched the 200ma when it spiked. However, it touched repeatedly on the 137ma. If I moved the average to 137 just for that stock (to predict touches for dip-entry, not for crossover strategy), would that be focusing on the concept, or the parameters? Thoughts? Thanks.
I think it's statistically impossible to determine whether a 137 ma is "better" than the 138 ma
Based on Rayner's teachings, the parameters don't matter, it's the concept that does.
If the parameters do matter, than your trading strategy is prone to not work in changing market conditions
If you are trading short term, 50 and 200 is too much of course it doesn’t work... that is for mid term and Long term.
depend on trader mindset
I know this comment is a year old but I fully agree. I actually had a query. I am learning day trading and was initially using the 8, 13 and 21 MA cause that's what everyone says is best. Then experimented with the 3 and 5 and literally saw that the crossover signals are way more effective. Like, I back tested the Euro USD and noticed that the crossover using these smaller MAs are way more accurate than higher MAs. Ofcourse since they are so small it won't be ideal for holding for long periods but it really got me wondering why no one seems to reccomend MAs as low as 3 & 5 for short terms trading
i use 20 and 50 on 5min for me its works pretty well, i trade only the first 3 hours of eu open and then when both eu and ny open.(GBPUSD)
One week is long term enough for you?
@@Attitude-royale please how does it work?
What do you mean by too many different markets
how do u put the numbers on your ATR like what u have now
do we trade on price crossing MA or trade on MA crossing MA?
gnus is HTB how do you short that stock?
I believe it works better on 9/26 than 50/200, I day trade using 9/26 Crossover and it works fine for me. 50/200 captures change over a bigger period of time and 9/26 on 5min chart captures quite subtle shifts of trend as well. Plus i mix it with RSI 30 or 40, and couple of other filters. What do you think. Thanks for making this detailed video, it really explains the whole concept in detail.
Do you use other time frames than the 5 min? Or just the 5 min?
Summary:
1. Moving Average Crossover don't work when you trade a few markets
2. Moving Average Crossover works best when you trade many different markets
3. Focus on the concept not the parameters
What about wma and sma cross over? But buying on the cross over with a limit buy.
Could you do a simple guide to plotting Elliott waves to actual charts? Thank you in advance
hello if want his paid courses i can give it for a lower price
@@abdo_xauwhat do you mean "lower price"
Do you offer Rayner's courses?
Elliot waves is quite easy ....and also someone can trade with good profit margin
Rayner is this apply to forex market
trading in 20 markets vs 3 market is not really better. since you are either short or long in all markets all the time (based on the definition of your strategy) you have just increased your exposure from 3% to 20% of your account. Or have I got it wrong?
hi Rayner, what do you meant by Go long and Go short?
going long means buying first at a low price then selling it at a high price while going short means selling first at a high price then buying it at a low price. Shorting may not be applicable to some markets that prohibits it.
good
What about ema 13/48,5 cross over? A backtested from etf hq
I understand the concept. But is the return e.g. 14% then on the total capital? I mean if you have 20.000€. And you pick 20 markets. Then You can invest only 1.000€ per market, since you will have to trade all of them at the same time. But some of them will make you the money. So are these performing markets able to give 14% on 20.000€ yearly on average?
I highly appreciate an answer :) thanks
useful
Hi Rayner,
Shouldn’t a beginner first concentrate on 1 or 2 markets
Thanks
thanx boz, can you discuss how to backtest, more power n godblez
well thats also depends what kind of moving average are you using, some works better than others , so using the 50 an 200 as benchmark is wrong
This moving average is only for 4 hours or Daily chart
Heeeeyyyyyy.....heee......where is your energetic sentence ... please be continue.
Good explanation
Sir, does MA work in stock market ?
Pls do video ichimoku
Great, but WTF uses this strategy for long term. I'm wanting to know short term gains. That chart he had showed 2-2 to 2.9 range to the upside. That's all I needed. Everything else was noise. F stop losses.
Crossover? Tried that and it is probably the most difficult stuff to understand to some.😂
Moving average crossover is very profitable.......if someone challenge me to make money with any indicator so...MA crossover will be my choice
How you made crossover data spreadsheet?
I believe he spent times to write every profit/losses of each time fast MA line crosses slow MA line for the pass market trends. Or maybe there's a software to generate the spreadsheet.
@@annatsukiya I am pretty surprise why he rarely answer to comments here... everybody seem to wonder about the software he is using
Can you make a video explaining how to back test a trading strategy please :)
hello if want his paid courses i can give it for a lower price
does he ever trade live?
can i request any video?
3*20 equals no 90 yet 60.
I don't understand the "Many markets/Few Markets" part.. Is "Market" a Stock?
So..
Moving average crossover works best when you trade "many different markets"
Moving average don't work when you trade a "few markets"..
My understanding of this is:
Moving average crossover works best when you trade many stocks
..
Moving average don't work when you trade a few stocks..
it took me time to figure out what the tree ATR means...
Hey Rayner! How did you backtest these strategies? Did you use any tool or just eyeball a certain timeline?
I had a programmer to help with it using norgate data and amibroker.
@@tradingwithrayner cheers for the reply! Thank you for the good work.
Do you even make money
Just wandering with forex
if some challenge me to make money through Indicator ....so Moving Average will be my choice
7:26 I get what you mean but actually you're wrong, a few years ago a few statistics analysts carried a research of 300 years data in all kind of indices and markets doing only MA crossovers and found out 1, EMAs works better than SMAs and 2, the best parameters according to these guys are 13/48.5 days
Could you point out to me that piece of research?
@@tradingwithrayner follow the link I posted in the comment
Hmm seems I can't use .5 on mt4 would 48 on its own be ok
Can you explain more thoroughly how the risk is calculated when you trade multiple symbols and instruments? You say here to use 1% risk. How does that work in a multiple instrument trading set up? Do you mean risk 1% per every open positions or risk 1% as a whole for all open positions.
1% per trade
For trend-following, Rayner has a maximum open position of 10-20.
You may think it's suicide as he puts 10%-20% at risk, but the market selection matters as several instruments are not correlated with each other (Diversification).
Check out mistake #4 on this video: th-cam.com/video/nOFCZXDHfag/w-d-xo.html
❤👍
So, what is the best moving average crossover? 🤣