Hi all!
I'm new to this thread, but I have some experience trading futures. I use TA and systems, and occasionally research new ideas and variances of old ones. I have tradestation 4.0, but have yet to master its programming capabilities (which are vast) much to my chagrin. One tool I have found useful in my trading of both futures and stocks is the Moving Average Channel (Mac). I think it was developed by Jake Bernstein (author/newsletter writer), and I use it to help me determine both the trend and support and resistance for a market. Mac is simply a 10 bar simple moving average of the high as well as an 8 bar simple moving average of the low, plotted on a price chart. The trend is defined as UP when the lows of two consecutive days are completely above the moving average of the high. The trend is defined as DOWN when the highs of two consecutive days are completely below the moving average of the low. In an uptrend, support is defined as being the moving average of the low. Conversely, in a downtrend, resistance is defined as being the moving average of the high. As a system, one could buy/short on the completion of the initial 2 bar signal. Also one could wait until the trend (2 bar signal) is determined and then sell at resistance in a downtrend, or buy at support in an uptrend. both approaches work. I often use a few other indicators to confirm the signals like adx, MACD, stochastics, but you can probably use anything you like and know. IMO, the signals and supp/res. of the mac is pretty powerful as a stand alone method. Nevertheless, I encourage everyone to play with it. I do not know the significance of choosing 10/8 as the periods, except that probably the 8 bar avg. low vs. the 10 bar avg. high, is due to the fact that things tend to fall faster than they rise. Additionally, mac can work in sideways markets by simply buying at the low avg., and selling at the high average. Take a look at a chart of the s&p with mac. It gave a sell signal two weeks after the top on 3/3, and gave low risk short entry points on 3/11, 3/25, and 4/9. I would like to test this idea more rigorously than I already have (even though I already use it in my trading), so if anyone out there is good with Tradestation/Supercharts easy language, we should start a discussion. I urge everyone to look at this indicator if they can.
Good Trading,
Frank
P.S. feel free to e-mail me at frankl28@wharton.upenn.edu
(that's frankL28, not frank one hundred and twenty eight) thanx.
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