Would a simple MA crossover trade strategy work?
Just for fun, would a simple Moving Average crossover trading strategy work? Using the 9 day and 22 day MA's, buy or sell 1000 shares at the closing price on the first day of a clear MA crossover.
Let's start with an arbitrary date that gives no obvious advantage, 21/2/2018 when the price spiked big time and buy the closing price of $11.75 (initial $11,750 trade). (we would've missed ~$2.50 gain from the previous day). What would happen by following this mechanical MA crossover trading strategy over the subsequent two years to-date?
https://invst.ly/pjifl here's the chart, price bars are not shown, only the MA's and closing buy / sell prices. ATM share price can 'gap up' or down, so the price at the MA crossover trigger can be a long way from the actual trade price.
Nevertheless, on 9 trades it would be 5 winners, 3 flat, 1 loser for a total +$6,120 gain. We'd currently be out waiting for another buy signal.
ATM Moving Average Crossover Trading Strategy |
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MA 9/22 |
- Buy or Sell the CLOSING price on the first day of a clear gap. |
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1,000 |
Shares traded |
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Date |
Buy |
Sell |
P&L |
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Buy |
Sell |
Trade P&L |
Cumulative P&L |
21-02-18 |
$ 11.75 |
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$ 11,750 |
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05-04-18 |
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$ 12.88 |
$1.13 |
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$ 12,880 |
$1,130 |
$1,130 |
10-05-18 |
$ 13.01 |
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$ 13,010 |
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21-05-18 |
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$ 11.04 |
($1.97) |
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$ 11,040 |
($1,970) |
($840) |
14-06-18 |
$ 11.50 |
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$ 11,500 |
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06-07-18 |
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$ 11.50 |
$0.00 |
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$ 11,500 |
$0 |
($840) |
17-08-18 |
$ 10.85 |
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$ 10,850 |
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18-09-18 |
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$ 12.14 |
$1.29 |
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$ 12,140 |
$1,290 |
$450 |
05-11-18 |
$ 10.15 |
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$ 10,150 |
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26-11-18 |
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$ 10.20 |
$0.05 |
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$ 10,200 |
$50 |
$500 |
29-11-18 |
$ 10.90 |
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$ 10,900 |
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19-03-19 |
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$ 13.70 |
$2.80 |
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$ 13,700 |
$2,800 |
$3,300 |
05-04-19 |
$ 14.55 |
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$ 14,550 |
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16-05-19 |
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$ 16.27 |
$1.72 |
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$ 16,270 |
$1,720 |
$5,020 |
04-07-19 |
$ 14.95 |
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$ 14,950 |
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12-08-19 |
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$ 16.04 |
$1.09 |
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$ 16,040 |
$1,090 |
$6,110 |
20-11-19 |
$ 14.67 |
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$ 14,670 |
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07-01-20 |
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$ 14.68 |
$0.01 |
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$ 14,680 |
$10 |
$6,120 |
Definitely not advice, this is purely an exercise just for fun.
:)