Wednesday, 25 May 2016
by Admin
in
Trading Strategy
Stock trading systems based on slow moving averages[SMA] are very straightforward to follow.

Let's look into this easy system.

Time frame chart:
  • 1 day chart.
  • 1 hour chart.
  • 30 minute chart
  • 15 minute chart.
stock-trading-systems-based-on-slow-moving-averages.png Indicators uses:   (multiple of 7)
  • 7 SMA, 14 SMA, 21 SMA.
Entry guidelines:
  • When 7 SMA goes through 14 SMA plus continues through 21 SMA, BUY/SELL in the path of 7 SMA as soon as it obviously makes it via 21 SMA. 
leave guidelines:
  • option1: leave when 7 SMA crosses 14 SMA once again.
  • option2: leave when 7 SMA returns and touches 21 SMA (again this is recommended to wait around until the present cost bar to close within the reverse side of 21 SMA).
Pros:
  • Again it is a simple set up and will not require any kind of calculations or other research.
  • Can produce positive results during strong marketplace moves, the system also can be very easily programmed and traded instantly.
Cons :
  • System requires periodical monitoring relating to a chosen timeframe.
  • SMA indicator signal could be confirmed following the current cost bar has been completely formed and closed.
  • Quite simply, when SMA stops changing and the transmission is fixed, traders may depend on such information to open a trade.