Tag: moving average crossover

Tag: moving average crossover

The golden cross trading strategy is still popular, but it’s old. When we tested the Golden Cross Strategy 100 times, it got a 42 percent approximate win rate with a 1.5 to 1 reward risk ratio and the profit graph in the Trading Rush App went in the upward direction, but it was not that good. The Golden Cross Trading Strategy uses the Simple Moving Averages, and as you already know, the simple moving average is a lagging moving average. In fact, it is slower than the Exponential and Weighted Moving averages. So what will happen if we improve the Golden Cross Strategy by switching the SMA with a faster moving average like the weighted moving average. And that’s exactly what I did. In the last video, we learned more about the weighted moving average and the strategy based around it. So in this video, I tested the better and faster Golden Cross Trading Strategy 100 times, and here’s what happened.

Number 1. Since the Original Golden Cross Trading Strategy got a 42 percent win rate, one can expect a similar win rate with this modified Golden Cross, after all, all we are doing is replacing the slower moving average with a faster one. But surprisingly, the win rate was actually better. In the Trading Rush App, the profit graph of the original Golden Cross went in the upward direction at the beginning, but then started a downtrend and didn’t really came back in the positive territory until the very end. Now remember, both strategies were tested on the same pair, same timeframe, and almost the same market structure. But if you look at the profit graph of the Weighted Moving Average Golden Cross, you will see that it is more consistently going in the upward direction. In fact, it never went into the negative territory at the start even though the market structure was the same.

Why? Why changing a simple thing as a moving average is making such a noticeable difference? There is not much difference between the Weighted and Simple Moving Average, right? Well, when the market movement is really good and the price is making big moves, you won’t notice much of a difference between the entry signals of the two moving averages. One will be earlier than the other, but compared to the big moves price makes in a good trend, they are not that far from each other.

But the problem is clearly visible in the slow-moving markets. As you already know, the price stays in a range most of the time. And when the trend is slow, the weighted moving average is like the Usain Bolt of moving averages, and the SMA is like a turtle. In the slow trending market, the WMA was so fast at reacting to the direction change, that the entry signals it gave were actually profitable. On the other hand, the simple moving average was so slow compared to the WMA, the entry signals were generated near the end of the trend. This is where the Weighted Golden Cross took the lead. This is where the Simple Golden Cross lost money, but Weighted Golden Cross made money.

And as you can see in the Trading Rush App, the Weighted Golden Cross Trading Strategy got a win rate of approximately 48 percent with a 1.5 to 1 reward risk ratio, which is much better than the Original Golden Cross Trading Strategy. When we tested the simple golden cross last time, it made a profit of 500. Profit is still a profit, but the weighted Golden Cross because of the faster and better entry signals, made a profit of 2000 which is a lot better. It lost 7 trades in a row and won 4 trades in a row. The best part is the profit graph. The profit graph of the weighted Golden Cross is more consistent and looks way better than the profit graph of the Simple Golden Cross.

5.8 + 7.5 + 6 + 6.5 + 7.3 = 33.1

And now, if we give the Faster Golden Cross Trading Strategy a Trading Rush Score, you will see that it gets a 33.1 out of 50. And if you come to the Official Trading Rush Website, you will see that it ranks 7th from the top, just below the Ichimoku Cloud, and above the Alligator Trading Strategy. And for reference, the Simple Golden Cross ranks 23rd from the top. So we can say that the Weighted Moving Average definitely improved the Winrate of the Golden Cross Trading Strategy.

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Golden Cross Trading Strategy – Can it really give Golden Win Rate after backtesting 100 TIMES?

Post author By Trading Rush
Post date September 19, 2020

golden cross trading strategy

Tag: moving average crossover

Does the famous Golden Cross Trading Strategy work better than the other strategies we have tested so far? You might have noticed that some News Channels like to talk a lot about this Strategy when a stock gives a golden crossover. In this video, I have tested the Golden Cross one hundred times, to see if the Golden Cross Trading Strategy actually works, and if not, what are the disadvantages you will have while using this strategy.

This is the 19th strategy we have tested 100 times in the strategies tested 100 times series. If you are watching this channel for the first time, check out other videos on the channel where we tested different strategies to see if they work or not. Also subscribe to the Trading Rush Channel, because it’s free, and you don’t want to risk your own money on Trading Setups that does not even work.

The idea of the Golden Cross is really simple. Just smooth out the price using two moving averages and buy at the crossover of the moving averages. In a Golden Cross Strategy, a 200 period moving average and a 50 period moving average is used. Here, the 50 moving average is the fast moving average, and 200 is the slow moving average. Usually, these moving averages are simple moving averages, and I have used the same while backtesting it 100 times.

The Golden Cross Trading Strategy goes something like this. When the 50 period moving average, crosses above the 200 period moving average, it’s a long entry signal. Similarly, when the 50 period moving average crosses below the 200 period moving average, it’s a short entry signal.

Now the Golden Cross strategy is more of a buy and hold kind of strategy. It is mostly used on the higher timeframes to hold a stock or forex pair for a long period of time.

Unlike other indicators we have seen on the Trading Rush channel, the Golden Cross Strategy doesn’t tell you where to put the stoploss. But most people like to set the stoploss just below the 200 period moving average. Furthermore, many traders like to trail the stoploss with the 200 period SMA to catch the big move. But as you already know, market is in a range most of the time, so many traders rarely book a very big profit.

Obviously, you can’t take every buy signal given by the golden Cross Trading Strategy, because it will give a lot of false entry signals in a range market. To filter those false signals however, you can modify the strategy and only buy, when the candle is completely above the 200 period moving average when the crossover happens. Similarly, only sell, when the candle is completely below the 200 period moving average when the crossover happens.

So here’s the complete modified Golden Cross Strategy. If the 50 period SMA crosses above the 200 SMA, and if the cross over candle is above the 200 SMA, it’s a buy signal. Stoploss goes below the 200 SMA line.

Similarly, if the 50 SMA crosses below the 200 SMA, and if the crossover candle is below the 200 SMA, it’s a sell signal. The stoploss goes above the 200 SMA line. If you want to trail the stoploss, you can simply trail it above the 200 SMA as it goes down. Some traders also like to exit the position at the next crossover. For example, if you buy when the 50 SMA crosses above the 200 SMA, your exit signal will be when the 50 SMA crosses below the 200 SMA. Similar thing applies to the short setup, just opposite.

Since we tested other strategies 100 times with a fixed reward to risk ratio, and to compare this data with the data we got from other strategies, I have tested the Golden Cross Strategy with fixed reward to risk ratio as well.

So after testing it one hundred times, here’s what happened.

Number 1. Since the Golden Cross uses simple moving averages to find the entry signal, and since moving averages are lagging indicators, the entry signals were lagging too. That’s obvious, but because of the late entry, the stoploss was sometimes way too far which led to a bad reward to risk ratio.

Far away stoploss is not really a problem if the price makes a big move in your favor. But as you already know, most of the time price is moving sideways. So the probability of trade making a big profit consistently is really low, unless there is some other catalyst that is moving the market strongly in one direction.

Number 2. Since we modified the Golden Cross to filter false signals, the losing trades were successfully avoided. But the performance was not that good when compared to other strategies we have seen on this channel. Even if you don’t use a stoploss, and only exit when the Golden Cross gives an opposite crossover, you are probably not going to be way more profitable than the fixed profit setup. During this backtest, there were two trades that had more than 10 times profit potential. But then there were many trades that had 3 times more loss potential than the fixed stoploss. So even if you had booked the 10 times profit in 2 trades, the multiple trades with 3 times more loss would have brought your average down.

You should probably use some other indicators to confirm entry signals, instead of using the Golden Cross alone. Since money management is one of the key in trading, it is a good idea to use a proper stoploss and a favorable reward to risk ratio.

So after testing the Golden Cross Trading Strategy, I got the win rate of approximately 42 percent with the reward to risk ratio of 1.5 to 1. And since this is an approximate win rate, we can safely say that the Golden Cross Trading Strategy, is a hit or miss strategy, just like the aroon strategy. In other words, this strategy on its own doesn’t have a very high probability of making big profits consistently. I had 5 winners and 5 losing trades in a row. I started with an account balance of 10000, and after 100 trades, it was only up by 500. Compared to other strategies we have seen so far on this channel, this is not the best. Furthermore, the Golden cross strategy took the longest time to complete 100 trades. In most videos in the strategies tested 100 times series, I have tested the strategies on the same pair which is Euro JPY. But for this strategy, I had to switch to 3 different pairs to take 100 trades. That’s because I ran out of data on 2 forex pairs. This means, that the golden cross strategy is not only a hit or miss strategy, but it also takes a lot of time to make profit. Most indicators we have tested so far, were able to make a lot more profit than this in a shorter amount of time.

The Golden Cross Strategy is a really old strategy. Since then, traders have created many different indicators that actually work, and we have tested many of them on the Trading Rush channel. You should test your strategy as well, and you can use the Official Trading Rush App to do that. It saves a lot of time by calculating win rate, profit graph, and other data in just one click. Download it from the Play Store, or using the link in the description.

That’s all. You now know more about the Golden Cross Strategy. Liked the video if you liked it. Subscribe and ring that notification bell so you don’t miss new videos, where we test more strategies 100 times to find their win rates. After all, you don’t want to trade using an indicator that only gives your money to your broker, and not vice versa. Thanks a lot for watching!

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Simple Moving Average Crossover Strategy risked 100 TIMES?

Post author By Trading Rush
Post date August 30, 2020

SMA crossover strategy

Tag: moving average crossover

What’s the real win rate of the Simple Moving Average Crossover strategy? I have already tested the Exponential moving average strategy 100 times to find its real win rate. Well, in this video, why don’t we test the Simple Moving Average Trading Strategy 100 times, to find its real win rate. I have tested many different trading strategies on the Trading Rush channel, if you are a new to trading, watch them. And don’t forget to subscribe to the Trading Rush channel, and ring that notification bell. After all, you don’t want to risk your money on a strategy that doesn’t even work.

The Simple Moving Average Trading Strategy consists of 2 or more simple moving averages. All the moving averages used, have different input lengths. But the most common simple moving strategy, is the 9 and 21 period moving average strategy. In this strategy, a trader uses the crossover of the moving averages, to find entry and exit signals. Since simple moving average smooths out price data, you can gather a lot of info about the price direction. With the help of a simple moving average, even your dog can identify if the price is trending upwards, downwards, or is in a range. But if you combine two simple moving averages that smooths out price data, you can create a simple but effective trading system.

Here’s how the SMA crossover strategy goes. When the 9 period SMA, crosses above the 21 period SMA, it’s a buy signal.

Similarly, if the 9 period SMA, crosses below the 21 period SMA, it’s a sell signal.

Here, the 9 period simple moving average, is the fast moving average. And the 21 period SMA, is the slow moving average.

Now, if you take trades using this SMA crossover setup, where should you put your stoploss?

Well, in the long setup, when the 9 SMA crosses above 21 SMA, you can set your stoploss just below the swing low.

Similarly, in a short setup, when the 9 SMA crosses below the 21 period SMA, you can set your stoploss below the swing high.

Now, you can trade using this simple setup, but it’s not very effective, and I don’t recommend it, here’s why.

You see, if you can find where price wants to go in the long run, your job is half done. If you can identify where the price is trending in the long term, you are one step closer to making good money in trading. That’s because, when price is in a trend, it tends to move in one direction for a long time. If you take trade in the direction of the long term trend, you can achieve higher and better reward to risk ratios. In simple words, you will make more money. And you can easily find that direction of the long term trend, using another moving average. Usually, I use 200 Exponential moving average to find the long term trend. But this time, since the topic is about simple moving averages, I have used 200 period simple moving average to find the long term trend direction.

If price is above the 200 SMA, it’s an uptrend, and we should only look to buy. If price is below it, it’s a downtrend, and we should only look to sell.

So here’s how our complete modified Simple Moving Average Crossover strategy goes.

Only take buy entry signals, when 9 period SMA, crosses above 21 period SMA, and price is above the 200 period Simple Moving Average.

Similarly, only take sell signals, when 9 period SMA, crosses below the 21 period SMA, and price is still below the 200 period simple moving average.

I have tested this Simple Moving Average Crossover setup 100 times, with just few simple tweaks. These tweaks are there to make the strategy more effective in the long run.

When the crossover strategy gives a buy entry signal, the candle that is giving the entry signal, should be above the moving averages. If it is slightly touching it, it’s still a valid setup. Furthermore, the entry candle has to be above all 3 moving averages.

Similar thing applies to the short setup. When the crossover strategy gives a short entry signal, the candle that is giving the signal, should not be touching the moving average. A slight touch is fine. Also, the entry candle has to be below all 3 moving averages.

So, I tested Simple Moving Average Crossover Trading strategy 100 times, and here’s what I found out. I’m using the Official Trading Rush App for backtesting this strategy. You can use it while testing your trading strategy as well. It will calculate the win rate, the number of winners and losers, and other data in just one click. Saves a lot of time. You can download the Official Trading Rush App from the Google Play Store, or using the link in the description.

Number 1. The best part about the SMA crossover strategy I found, was the ability to show the end of a pullback, or at least that’s what I thought at first. Let me explain. You see, by adding the 200 period Simple moving average, we have turned this strategy into a trend following strategy. The 200 SMA is showing the trend direction, and the 9 and 21 SMA crossover is giving the entry signals. Most of the time, the SMA crossover setup gave good entry signals at the end of the pullback. But that was also a kind of disadvantage.

Number 2. Unlike Exponential moving average, where latest candles are given more priorities while calculating the average. In a Simple Moving Average, all the candles are given equal priorities while calculating the simple average. Because of this, the SMA crossover strategy was giving late entry signals than the Exponential moving average crossover strategy. And on top of that, all moving averages are lagging indicators. They possess no ability to predict the future movements.

When there was a good long term trend going on, the signals I got from the SMA crossover strategy were profitable, but sometimes, the signals were so late, that the trend was already over.

Number 3. In this back test, I lost most number of trades, when the long term trend was not strong enough, or was trending sideways. This could be easily avoided by using some other indicators, or by simply looking at the 200 period moving average. If the moving average is looking flat, there is no trend going on. I have also made videos on other indicators that identify if the market is trending or not. Check them out if you want.

So after testing the Simple moving average crossover strategy 100 times, I found that the win rate of the strategy is approximately 48 percent. What this means is, the SMA crossover strategy, and the Exponential moving average crossover strategy, have a very similar win rate. Both of them are profitable strategies. Since most people will use a Reward risk ratios of higher than 1, I used a 1.5 to 1 reward risk ratio, and because of that, I was able to make money, even with a win rate that is less than 50. This is not the best strategy we have tested so far. In this back test, I won 6 times in a row, and lost 6 times in a row.

Other indicators performed way better than this. If you want to know win rates of other trading strategies, check out other videos on the Trading Rush Channel, or on the Trading Rush Website. And if you want to use the Trading Rush App while testing your strategy, feel free to do so. You can download it from the Play Store, or using the link in the description.

That’s all. Now you know more about the Simple Moving Average Crossover Strategy. Like the video if you liked it. Subscribe to the Trading Rush Channel if you want to see other strategies tested 100 times, to see their real win rates. And thanks to everyone for watching.

Probability of Moving Average Crossover Strategy

Post author By Trading Rush
Post date July 9, 2020

moving average crossover strategy Indicator Trading Strategy EMA intraday trading strategies 100 0

Tag: moving average crossover

Moving Average Crossover Trading Strategy EMA SMA also known as Moving Average Crossover Indicator Strategy for Stock Trading and Forex Trading so you can know the real profit potential and make money in Intraday trading and Swing Trades. Can Moving Average Crossover Strategy Indicator be profitable. Learn the secrets and how to trade Moving Average Indicator Strategies with real technical analysis examples in this tutorial guide.

Does moving average crossover indicator trading strategy even work? Are online trading guru’s telling you false information? I have wasted years testing every trading strategy out there, before i found the right one, that worked! I’ve created this channel to expose every strategy, and show their real probabilities, so you don’t have to waste your precious time like i did! I’m not here to sell any kind of online course, I’m just here to help you in your Stock trading and Forex trading career. If you find this video helpful, consider subscribing to support the channel! In this video i will back-test 100 times, a very famous trading strategy called the moving average crossover strategy. Yes you heard it right. testing 100 times takes time, and will most likely prove, if you should risk your hard earned money, using this strategy! This video will be very similar to the RSI and MACD video i made a while ago. If you want to know if those strategy work after testing 100 times? Check those videos out. On trading view, The Moving Average crossover strategy will look something like this. I know, one of the Simplest strategy out there. I have already made a video on the basics. If you have never heard about this moving average crossover strategy, check out my previous video where i explain this strategy in detail. If you remember, In my last video, we modified this moving average crossover strategy, to filter false signals. To filter false signals, we will use the 200 period exponential moving average. You can use SMA too if you want. We will use this 200 period moving average to find the direction of the long term trend. Remember, trend is your friend. Always take trade in the direction of the trend, especially if you are new. If the price is above the 200 period moving average, we will only look to buy. And if price is below the 200 period moving average, we will only look to sell. So, here’s how our modified Moving average crossover strategy goes. When price is above the 200 period moving average, and we see the 9 period moving average, crossing above the 21 period moving average, we will buy as soon as the crossover happens. Similarly, when the price is below the 200 period moving average, and we see the 9 period moving average, crossing below the 21 period moving average, we will sell as soon as the crossover happens. Also, In the last video, I said not to take trades when the entry is too far from the moving average crossover. During the back testing, I found 2 to 3 trade setups, that had entry signals far way from the crossover. So i skipped them. So, the question is. If you enter trades using Moving average indicator, will you become a profitable trader? In the next few minutes, i will show you how the profit graph looks like after taking 100 trades, and how much is the real winning percentage of the Moving average crossover strategy, and how many losers you can expect in a row. I will fast forward the next clip to save your time. The following clip can help you understand, how this strategy looks in different market conditions, so do watch carefully. For back testing, i have used Euro JPY chart. This strategy works on any time frame, and also works on both Forex, and stock markets. Here, I’m using 30 minutes time frame. I’m also taking sell setup in this example. Strategy for sell setup is very similar to buy setup. Check out other videos, where I tested MACD, RSI, and many other strategies 100 times, to show their real win rates. After all, you don’t want to risk your money, on something that doesn’t even work. Like the video if you liked it. Subscribe now for more trading videos, and don’t forget to ring that notification bell as well, so you don’t miss any future video. Thanks for watching.

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Moving Average Crossover Trading Strategy

Post author By Trading Rush
Post date July 9, 2020

moving average crossover strategy Indicator Trading Strategy Ichimoku Kinko Hyo intraday trading money income

Tag: moving average crossover

Can moving average crossover strategy make you a profitable trader? How to trade it and make more money? What moving average strategy is the right one? How to use this average indicator properly without blowing up our accounts? Lets find out.

Moving Average is one of the oldest and most powerful indicator ever made. Not just because its simplicity, but it actually shows you average price of a stock, and even shows the direction of the trend. You might have seen some business news channels get excited when price crosses the 200 period moving average, Because it can indicate a start of a new trend.
But like i said in my Ichimoku indicator video, the indicator that are easy to understand, can be difficult when it comes to executing trades with it. If stock and forex trading was easy, everyone would have been a millionaire.

The moving average crossover strategy is simple, but there are few challenges you may encounter when executing trades with it. Lets see what are they, and how to avoid them, once we actually understand, how to use the moving average crossover strategy properly. Like always, In my next video, I will test this strategy 100 times, to find its real win rate. I’ve already tested many other indicators 100 times, to show their real win rates. If you have not watched those videos, go watch now. And subscribe to the Trading Rush Channel, to see this moving average strategy, and many other strategy tested 100 times. After all, you don’t want to risk your money on something that doesn’t even work.

There are multiple ways to set the stop loss in this strategy. Once you enter a long trade, You can set the stop loss, below the Swing low. Or set it just below the Crossover of these moving averages. Remember to give the price, enough room to wiggle around, otherwise your stop loss can get hit. In a long setup, If you set your stop loss below the swing low, there is low probability of price hitting your stop loss.

Okay! Now lets talk about the profit target. Something every trader loves. But where should we set our profit target in this moving average strategy? Just like the stop loss, there are different ways to set profit targets. Some use a fixed target. For example, some will set their profit target 2 times more than the risk. This way, they will only take 200 percent profit. Nothing more, nothing less. This is a good strategy to get consistent profit.

On the other hand, some will take profit, and exit the trade, when another moving average crossover is generated. This way, they have a chance to stay in a long trend for a long time. This strategy can generate great risk to reward ratio, but market doesn’t make big moves every-time. These both methods have their advantages and disadvantages. It really comes down to the traders personality. If you can stare at the screen for a long time, and keep adjusting your trade, go with the second method. If you cannot stare at the screen and see your profit loss changing, go with the first method. That way you don’t have to sit to adjust the trade. Just set your stop loss and profit target, and go for a walk, or maybe look for another trade. Just remember to cancel your stop loss, when your profit target order hits, and vice versa.

That’s all there is to it.

In my next video, I will test this strategy 100 times, to see if this strategy is profitable or not. Subscribe to the channel if you want to see it.

Or maybe check out other videos, where I tested MACD, RSI, and many other strategies 100 times, to show their real win rates. After all, you don’t want to risk your money, on something that doesn’t even work.

Like the video if you liked it.

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5 BIG Moving Average Strategy MISTAKES

Post author By Trading Rush
Post date July 6, 2020

stock trading stocks forex trading moving average startegy strategies a