StockFetcher Forums · Filter Exchange · 3 MA System<< >>Post Follow-up
JoeyVinyl
120 posts
msg #152357
Ignore JoeyVinyl
modified
5/29/2020 12:54:15 AM

I was searching for something else when I found this online. I need to spend more time checking out his web site but I liked the page I landed on. It's a very simple MA crossover strategy with clear entry and exit points - mostly. As he says toward the bottom of the page, under the chart, "Whipsaws are not entirely eliminated." (A whipsaw being one trigger MA crossing over or under another trigger MA almost daily.) I only saw that in a couple of charts these filters brought up but it's easy enough to avoid by just looking at the price action on the chart.

I've included a link to the site where I found this and the relevant signals as a comment in the filters. I try to do that with any filter that I don't create myself. It helps to be able to go back and see the original if I mess it up, and I like to give credit to the original creators, even if I've modified their work.

First one is for going long.
Fetcher[
/* https://www.incrediblecharts.com/indicators/moving_averages_three.php */
/* Go long when:
middle moving average crosses to above slow moving average from below; AND
fast moving average is above middle moving average.
Close long when fast moving average crosses to below middle moving average from above.

Go short when:
middle moving average crosses to below slow moving average from above; AND
fast moving average is below middle moving average.
Close short when fast moving average crosses to above middle moving average from below. */

set {buy1, count(MA(15) crossed above MA(45),1)}
set {buy2, count(MA(5) is above MA(15),1)}
set {buy, buy1 * buy2}
set {sell, count(MA(5) crossed below MA(15),1)}

Show stocks where close is between 1 and 50
Average Volume(30) is > 500000

draw MA(5)
draw MA(15)
draw MA(45)
draw buy
draw sell

add column buy
add column sell
add column separator
add column industry
add column sector
sort column 5 descending
]



Second one is for shorting.
Fetcher[
/* https://www.incrediblecharts.com/indicators/moving_averages_three.php */
/* Go long when:
middle moving average crosses to above slow moving average from below; AND
fast moving average is above middle moving average.
Close long when fast moving average crosses to below middle moving average from above.

Go short when:
middle moving average crosses to below slow moving average from above; AND
fast moving average is below middle moving average.
Close short when fast moving average crosses to above middle moving average from below. */

set {short1, count(MA(15) crossed below MA(45),1)}
set {short2, count(MA(5) is below MA(15),1)}
set {short, short1 * short2}
set {cover, count(MA(5) crossed above MA(15),1)}

Show stocks where close is between 1 and 50
Average Volume(30) is > 500000

draw MA(5)
draw MA(15)
draw MA(45)
draw short
draw cover

add column short
add column cover
add column separator
add column industry
add column sector
sort column 5 descending
]



You could use any three MA's that you want. His example uses 5, 21, and 63. I chose 5, 15, and 45 because I think you need a short enough one for the fast one and the other two are three times the previous one to give some spread. I'm going to play around with other lengths and I'd suggest that you do too if you want to use these filters. Find ones that work best for your investing or trading style. I think I'm going to go with four times the previous one so it'll be 5, 20, and 60. I'm thinking that a wider range between them might be better. I guess I'll find out.

As always, if you want to try these feel free to change any parameters or add any indicators you like to make it work for you.

ETA: I know the average trading week is 5 days, and the average trading month is 21 days, but I just found out that in 2020 the average length for a trading quarter is 63 days, which explains his MA length choices.

Cheese
955 posts
msg #152358
Ignore Cheese
5/29/2020 1:51:53 AM

JoeyVinyl modified 5/29/2020 12:54:15 AM

You could use any three MA's that you want. His example uses 5, 21, and 63. I chose 5, 15, and 45 because I think you need a short enough one for the fast one and the other two are three times the previous one to give some spread. I'm going to play around with other lengths and I'd suggest that you do too if you want to use these filters. Find ones that work best for your investing or trading style. I think I'm going to go with four times the previous one so it'll be 5, 20, and 60. I'm thinking that a wider range between them might be better. I guess I'll find out.

As always, if you want to try these feel free to change any parameters or add any indicators you like to make it work for you.

ETA: I know the average trading week is 5 days, and the average trading month is 21 days, but I just found out that in 2020 the average length for a trading quarter is 63 days, which explains his MA length choices.
=================================================================================

@JoeyVinyl
THANK YOU FOR SHARING. There is a lot of trading information and good practice here.


JoeyVinyl
120 posts
msg #152362
Ignore JoeyVinyl
5/29/2020 11:47:56 AM

@Cheese

You're welcome! I know the "classic" MAs are 50, 100, and 200, but I always like to know why people pick different ones. For this system using week, month, and quarter makes a lot of sense to me. I just wanted to share why he's using those since I didn't know at first.

JoeyVinyl
120 posts
msg #152363
Ignore JoeyVinyl
5/29/2020 11:57:22 AM

One thing I would suggest when using a filter that gives buy and sell signals is to look at a year long chart to see when the signals happened and what the prices were. Look at how far apart they are. See what the price difference is between the buy and the sell signals. Would you have made money or lost money? If the previous signals show that I would have made money then I'm more likely to trust them when they show up again.

Cheese
955 posts
msg #152370
Ignore Cheese
5/30/2020 12:19:33 AM

JoeyVinyl 5/29/2020 11:57:22 AM

One thing I would suggest when using a filter that gives buy and sell signals is to look at a year long chart to see when the signals happened and what the prices were.

Look at how far apart they are. See what the price difference is between the buy and the sell signals. Would you have made money or lost money?

If the previous signals show that I would have made money then I'm more likely to trust them when they show up again.
==================================================================================

@ JoeyVinyl
Even good filters are dime a dozen.
It's the trading posts like yours that are valuable and have become more rare.
Thanks again, Joey.

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