Strategy Session: Price, MA Crossovers on Strong Volume

Nov 13, 2006

Let’s pull a question out of our support forum that sparked a pretty good strategy in Trade-Ideas with a positive expectancy as reported by The Odds Maker.

Here was the pitch:

“A trading strategy I am trying to implement in Trade-Ideas is to use moving averages over 15, 30 and 60 minute periods along with volume confirmation. I am looking for price and MA crossovers on strong volume. Can this be done in Trade Ideas? If not, are there any equivalent signals?”

Our at bat (I consider it a double – I miss baseball):

OK here is my stab at your strategy. First let’s come clean: we do not have MA crossovers on that small a time frame, but you are looking for price and MA crossovers and are open to equivalent signals. This is good because it suggests flexible thinking vs. dogmatic thinking.

SO here goes:

The strategy uses alerts we developed for Mel Raiman and his Precision Trading System. The alerts look for crossing of trendlines on the timeframes you requested. All of this of course on stronger than usual volume.

Using the Odds Maker I’ve come to really make this strategy work. Its one thing to create a strategy but its another knowing how and when to use it. The Odds Maker analyzes recent market activity using this strategy to provide guidelines on what to expect – without risking your precious capital!

Here is The Odds Maker readout:
173 winning trades out of 352 total = 49.15%. Winning trades defined as up \$0.01 in 45 minutes;

• Average winner = \$0.3432
• Average loser = \$-0.1882
• Net winnings = \$29.62
• Best = \$10.52
• Worst = \$-1.85
• Casino Factor = 98%

To undertand what these numbers mean, refer to The Odds Maker manual: https://trade-ideas.54solutions.com/OddsMaker/Help.html

Footnotes

• We modeled a similar strategy of interest called, Moving Average Breakouts
• Link to other Strategy Sessions here
• Remember that these set-ups are sketches meant to give you an idea how to model your own trading plan. Use this ‘as is’ or modify it to your own liking as many others do. Know, however, that Trade-Ideas.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, alerts and all other features are for research purposes only and should not be construed as investment advice