My Holy Grail > Moving Averages+ MACD (dema)

[TRENCH]

Dear Reader,

I have recently been on a period of discovery. It appears that after many hours, many books , many nightmares, I have finally found a true method for buying and selling. I am into the shorter period time frames like 1 to 2 weeks.

I use CFD's which are just like shares.. but you put down just 10% margin and they give you gauranteed stop loss at 5%.. of course we never tolerate that much in short terms trades..but they do offer it in case. There is so much info out there that I almost gave up thinking that it was all hype and that there was no actual true and tried method. It then struck me in the face one day recently. I was looking at a chart of good old BHP. It is currently in a neat little range. I wacked on a few moving averages. I tried a few exponential MA time periods and found a longer term and shorter term pair that worked as a nice support or resistance area (depending on the trend (up/down) )

I found when above the long term the overall trend is up .. and of course below we would be down. Then I looked at the short term.. when above we went up.. when below we went down. Now i here you saying.. what about whipsawing. Well I filter this out with my little macd dema. Obviously is is not as straight forward as I have suggested .. but with correct money manageent.. and that is essential, a few other filtering tools etc > I believe there is a workable method to accumulate riches.

I am also using key resistance and support levels for buying/selling and shorting/covering.

COMBINE MA's and support resitance > and you have a lethal weapon. It's that simple. I suggest to anyone... go read up on the MA's.


For longer term.. moving averages that cross above or below each other .. IE: long vs short ma's /// are quite reliable for the position trader.


ALWAYS USE A LINE CHART.. THEN A BAR CHART> line charts filter the noise.. bar chart then show the intraday effect of the ma's.

Just to prove a few points.

Go look at BHP .. note how the 11 day exp MA and macd dema all have a powerfull effect on price. Th last upleg through that 11 day ma showed a buy at 11.25ish and now it's up at 12.50ish

Go look at WOW ... one of my favourite trading stocks. Put a 60 day EXP MA on.. see the effect. At the moment its a short right there at 11.50

Look at RIO.. A recent buy> it just penetrated back up through the 12 day ma. It has since been up as much at $2 form that point to 36.85

Go look at BHP .. today it was a short at $12.50.. right at resistance.



Keeping it simple here.. just my thoughts.

I ASK YOU TO ALL PARTICIPATE IN THIS THREAD > THERE IS MUCH TO TALK ABOUT AND MUCH MONEY TO BE MADE!!

I look forward to many happy days ahead with the new mehtod.

Make a few hypothetical trades.. share with us and talk to us.

Cheers

LG

[marcer]

LG I just use Big Charts. I usually (not always) look for a share in a gradual uptrend (too steep and its liable to fizzle quickly)

I use their 3 default MA's and look for where a share has gone sideways on its uptrend for a week or two. Then I jump in and wait to trade it's next short spurt. I look for 8 - 15% and then out according to what the MA's are doing and how steep the spurt is. If I feel the share has gone up too steeply, I'll sell while its still way above the MA, as it seems a lot of the time they fall back quite quickly.

I am trying to work on the maxim that no one ever went broke making a small profit. If I can make around 10% 6 or 7 times a year, with a 2 or 3 failures where my stop loss is activated and I lose 2-3%, then I'm happy.

Regards Marcer

[OldRider]

LG:Your system has at first glance some similarity
to that developed for shares in the early seventies by Robert Lichello.

His system was developed for this time and works well in a ranging market when using only strong,stable companies,such as those you mentioned,with a reasonable holding >$20000 to minimise brokerage costs,and the bigger the market the better.I don't think NZX would be all that good.In an uptrending market it will not be as good as buy & hold,though will still make money,in a down trend it will lose and not work.I have downloaded and used for some time the simple calculator available from this site for some guidance:
http://www.aim-users.com/ it took a short while to understand,but there is plenty of information on the site for assistance.

AIM stands for automatic investment management,the system has many devotees and Lichello's book - how to make a million on the stockmarket automatically though out of print still has quite a market through amazon.

I found his ideas added to my understanding,were well worth the time taken,were profitable within limits,and a low risk strategy.

[Ham]

MAs and MACD are truely powerful as you suggest. Alone, though they can lead to whipsaws and usual problems of being lagging indicators.

After 3 years of TA study my system (over 200% return p.a) relies on Elliot wave theory (so I know precisely where in a trend the stock is) then confirmation of wave count with MAs, W%R and stochastics to determine exact entry point and ability to calculate exit points with amazing accuracy. This works for short term initial trend trades (out of SRA yesterday for 50% gain in 13 days) and equally for longer term holds. There is a fortune for the picking - and it is so reliable that I can even make a forward plan of which stocks will be a trade in which coming months.

All this, I might point out, has taken years of research and testing and assimilation of current research with traditional Technical Analysis. Not an instant road to riches, I can assure you.

[OldRider]

A point I omitted in my previous post about the AIM system,is that with it holdings are incrementally added to or subtracted from ,this requires a reasonable holding so if the sale of 20% is recommended a reasonable number can be sold without brokerage sucking out too much .

[TRENCH]

Evening Chaps,

Good to see you have joined in. Thanks to Old rider for the links and to HAM for the info on elliot wave etc. I have to disagree with Old Rider .. in you saying that MA's can't be used to profit in down trending markets?? What if i'm shorting. Maybe I mis understood you> please confirm?

I was always told and always read that elliot wave is too complex and unreliable and that it's for more longer term stuff? I am into the short term stuff. I don't really like the idea of the intense intraday trading. It seems to be that most market pros who day trade.. just use very basic stuff.. I think there is a lot of hype out there. I always look at floor traders in the USA who make millions.. and they dont use anything but very basic chart points and instinct.

I am looking for the right method, and I am thinking that there isn't any true right or wrong method. I think the key is to combine a respectable method with good money mangement. Am I right.

Any ideas and advice that I can bounce off would be apprecitated

Are you guys longer or shorter term traders?

Thanks again for the input


LG