Moving Average Crossover Strategy
A personal story...
I am sure I read somewhere in one of the Market Wizard books that this is the only strategy that a team of Forex analysts and programmers ever proved to provide long term positive returns. I don’t recall them sharing the settings though!
The other thing they failed to mention, as do many others are the exact Entry, Stop and Target used. Often mentioned is take a Long entry when the Fast MA crosses the Slow MA and go Short on reverse. This is not clear, does it mean just when the MA’s cross, wait for the candle to close etc. Also what about that Stop – Where does that go? Target is probably when the (unclear) reverse trade Entry rules are met.
The above aside I believe a strategy can be defined that has a clearly defined rule base. One thing I am quite sure of it that the Moving Average settings will have to be tailored to each Currency pair and time frame.
One day, when I have a little more time I hope to explore this subject in more detail.
My objective will be to validate (or not) the idea of a profitable 100% mechanical moving average crossover strategy.