It’s Right There

A reader writes:

“Had a broker friend of mine over to the house today. Been with ML for over 20 years in Boston. Got to talking about markets and he’s frazzled. Almost like a deer in headlights right now. He spent 10 minutes telling me about all the contradictory data out right now. I fired up the PC and showed him how a […] MA crossover system works. I told him in about 20 seconds, “when the lines cross up, buy, when they cross down, sell”. He asked a lot of questions, we plugged in some stocks he has been in or out of, and when I was done 3 minutes later the guy looked like he had run a marathon and seen a UFO. He couldn’t believe how simple and uncomplicated it was. He gets it, but unless they see it first hand, many do not.”

It’s right there in plain sight.

10 thoughts on “It’s Right There

  1. Moving average crossover systems do not work any more.
    Back test any ma system on any market & see for yourself.

  2. I get a kick out of friend’s faces when I explain TF and systems trading and tell them, no news, no CNBC, no gurus, no predictions, no earnings reports, conference calls, Wall St research, etc.

    Just a quote screen and the price.

  3. Many people appear to “see” it. In my experience, no matter how many times I’ve explained the simplicity of Trend Following and regardless of how often some have been able to conceptualize the approach, they still cannot overcome the feelings associated with Trend moves.

    I am convinced, more then ever, that it is not the money they are after but a way to escape their own psychological vices by cleverly employing them into the business of trading. This, in my opinion, is one reason for TF’s endurance across genration’s.

  4. I won’t devote alot of energy to this response, but I have successfully traded a MA crossover system for 5 years.

    Being that you do not know what the parameters are, the time frame I am trading, and the markets I trade, you can’t speak credibly. I will leave it at that.

  5. Hi. First post here. I use a Price VS MAverage (40 weeks) system. Has been doing very well over the last years. Entry is a breakout above (or breakdown below) the Trend line.

    By the way, congratulations Michael for your books (I’ve already read Trend Commandments). They are very clear and if we’re open minded we begin to see trend following trading with a new perspective. 5 stars!

    (Waiting for the next book)

  6. Michael – I consider myself one of the best technical analysts in the world of trading. I do agree with the people here saying Moving Averages are not a significant trading tools. You answered ‘why?’ in your own comment – because technical analysis has simplified further. Automation and interest in trading are the reason it works so well.

    I can give you better trades than anyone in the business using the most basic charting tools. Email me and I’ll give you a couple!


  7. Wow, one of the best in the world? Right here on the blog, that’s great…Moving averages don’t work…hmmmmmm…

  8. I think one of the points of the original post is that most often people over-complicate markets, and go on for years with no quantifiable system, just gut feel and emotion, and when they see a simple, yet effective system, often they are taken aback as to it’s simplicity, yet ability to eliminate emotion.

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