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Strategies & Market Trends : Befriend the Trend Trading -- Ignore unavailable to you. Want to Upgrade?

To: Dr. Stoxx who wrote (7079)	5/15/2000 2:22:00 PM
From: cheryl122	Read Replies (2) \| Respond to of 39683

Thomas. Two questions. There is a chart study called Moving Average Oscillator which is basically the difference between two simple moving averages. example: MAO=MA(5)-MA(8) It is a single line on a chart fluctuating around a zero line which represents the crossover point. It seems easier to read and offers only one line instead of two for our charts. Do you use this function and do you see any disadvantage? Second question. The cross over point always occurs after the peak or dip in the price. Thus we enter a trade after the trend has begun. What is the reason to wait for the crossover? Is it because the crossover better represents or confirms a trend or is there some other reason. It seems that we can see that the lines are trending to crossover so why not make the trade earlier? Don't get me wrong, Im not arguing with success just trying to figure out why it works. Thanks

To: Dr. Stoxx who wrote (7079)	5/15/2000 3:34:00 PM
From: Dr. Stoxx	Read Replies (1) \| Respond to of 39683

BVSN UPDATE: Starting date: 3/24/2000. $6650 margin account; 200 shares per trade. Buy-and-hold purchase price: 66.5 Note: trades 1 through 5 are backtested. 1. Short: 66.5 to 45.25 = $4230 2. Long: 45.25 to 47 = $330 3. Short: 47 to 47.75 = ($170) 4. Long: 47.75 to 43.5 = ($870) 5. Short: 43.5 to 48 = ($920) 6. Long: 48 to 53.88 = $1156 7. Short: 53.75 to 47.5 = $1230 8. Long: 47.56 to 44.75 = ($582) 9. Short: 44.75 to 31.25 = $2680 10. Long: 31.375 to 36.25 = $955 11. Short: 36.1875 to 34.25 = $368 THE FOLLOWING TRADES ARE AT 400 shares per trade: 12. Long: 34.25 to 32.5 ($720) 13. Short: 32.375 to 35.625 ($1320)...ouch...serves me right for going to 400 shares (damn greed!) 14. Long: 35.75 to 44.625 $3532...YES!! 15. Short: 44.5 to 48.5 ($1620)...NO!! 16. Long: 48.5 to 44.625 ($1570) 17. Short: 44.5 to 48 ($1420) 18. Long: 48 to 47.125 ($370) 19. Short: 47 to 46.88 $30 20. Long: 46.75 to 46.88 $30 21. Short: 46.75 to 46.88 ($72) 22. Long: 46.625 to 47.88 $482 23. Short: 47.88 to 42.125 $2282 24. Long: 42.125 to 43 $330 25. Short: 43 to 45.25 ($920) 26. Long: 45.25 to 45.625 $130 27. Short: 45.5 to 44.938 $205 28. Long: 44.875 to... Total profit (closed trades only): $7,455 (112% return) Buy-and-hold: 32% loss!