SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Technical Analysis- Indicators & Systems
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: John Lawrence who wrote (2420)8/6/1997 8:25:00 PM
From: Joe W.   of 3325
 
TO ALL.... A Method for Timing Entries & Exits

I was recently re-reading Jake Bernstein's "The complete Daytrader" and came across a system he suggests for day trading the S&P futures that seems to have validity for timing entries and exits for stocks. It is a dual MA Crossover system that is used for measuring SUPPORT & RESISTANCE.

Normally MA Crossovers are lagging indicators but when you look at them as support & resistance they can be very accurate for entries and exits. There are basically 3 steps involved in using them:

1. Determine the slow & fast WMA lengths. Jake suggests an 8:1 ratio, but that is for use on S&P 5 0r 10 minute charts. For stocks a different ratio would be needed. I have tried 3 & 10, 6 & 12, and 5 & 20. The 3:10 seems to work well for stocks with a narrow daily range and the longer ratios work better for stocks with a wider daily range.

2. Determine market trend (This would be a short/intermediate trend) by examining the price chart for the last crossover signal. If the last crossover was a bullish signal then the trend is assumed to be up. Visa versa.

3. Buy on price declines to the longer of the two WMAs which SERVES AS SUPPORT, and SELL SHORT if the trend is down on price rallies to the longer of the two WMAs

Of course, protect your position with stop losses. (Actual or mental, % or dollar amount.)

Support and resistance has long been used for timing entries and exits but using the dual WMA crossovers for support and resistance is something I haven't heard mentioned on this board.

Any comments?

It would not be very difficult to code a scan to find these situations, but what I have been doing is just looking at the charts I get from my final MS6.0 scan and looking at the charts for entries based on this method.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News