subject: Is Trading Forex Moving Average Crossovers profitable? [print this page] Is Trading Forex Moving Average Crossovers profitable?
You may think I have lost my mind proposing that moving average crossovers are not profitable because my whole 4 hour trading strategy (see right for more details) is based on moving averages. However listen to me out. The point I need to make is that trading moving average crossovers in isolation is not profitable.
Well there's three reasons & they are as follows:
I am broadly in agreement with those findings (although I still think that you could be successful trading them on the every week & every month charts). However in case you are a regular reader of this weblog & read my every week trading updates every week, you will know that I use my main 4 hour trading strategy every week & it very always produces a profit. So why is this?
2. I always trade in the same direction as the long term trend. So if the pair is in an upward trend on the every day chart, then I will only trade upward EMA crossovers on the 4 hour chart, for example.
1. I seldom trade these crossovers in isolation. I always use the Smoothed Repulse indicator to confirm the best set-ups. I need it to be crossing above the 0 line for an upward EMA crossover & below 0 for a downward EMA crossover.
3. I do not trade every single crossover that occurs on every money pair that I follow. If the crossover bar is massive or if it occurs at the wrong time of the day, then I may well leave it alone. Similarly I may also turn down a trade if it basically doesn't feel right, & will very always ignore any crossovers that happen on a Friday.
4. I am liking to think I do know the GBP/USD & EUR/USD pairs inside out, having watched them every day for plenty of years. Therefore I will always be more confident about definite crossovers that occur on these six pairs than those that crop up on the EUR/GBP or USD/JPY pairs for example.
I spotted this morning that I failed to mention the Smoothed Repulse indicator when explaining my 4 hour strategy (which you can get free access to when you fill in the form above). However I have now added this additional information, & have also included a link to this page to show you how I find the very best set-ups.
So the point is that although trading moving average crossovers can give you some excellent trading opportunities, you ought to not trade them in isolation because you are unlikely to make money in the long run. You need to tilt the odds in your favour by filtering out the various set-ups & only trading those that have the highest probability of success, as I have hopefully demonstrated above.
