In a recent post I've published a strategy based upon a monthly pattern.
Good results, but if you want more gains (thus increasing a bit also risks) you may diminish the temporal frame, going into a weekly pattern.
These are the proposed indicators:
– the "queen" 20-periods moving average (for determining the trend), placed side by side with the 50-periods moving average for determining levels of support and target;
– parabolic sar is used more than keeping position, for fixing "middle" target levels for long/short positions;
– more "indicative" than psar, is 11-periods RSI, where overcoming the upper/lower bands give a good signal for exiting positions (and therefore a new entrance).
Below some examples (realized on m.prorealtime.com, where the instrument of automatic draw of oblique lines is very useful).
Patter is very easy and works weel with a huge variety of financial instruments (indexes, shares, etc.). The real confirm of the trend is simply the crossing up or down the 20-periods moving average.
FTSEMIB (Italy)
Comment: Long structure since april 2016: we entered on the reversing of p-sar if we assume a "speculative" approach or, a bit after, on the crossing of the blue line (20-periods mov.avg.). RSI has revealed many "local" stop profit targets (no. 3); this instruments also helps for identifying clearl throwback towards the blue line.
Recently, the support of 50-p. mov. avg. has avoided the formation of a short structure.
CAC- ALL SHARES (France)
Comment – Very strong long signal in the same period of the previous picture in 2016; no points of uncertainty on keeping long in the last year and half; RSI may have revealed some points of target profit.
The throwbacks has been always limited to the support of p-sar line or 20-p. mov. avg.
Simplifying more and more, another conclusion of this pattern is that for reaching good results you may use only 20 and 50 periods moving averages and then comparing the distance among them and the current close and/or the movements of the single/lat 2-3 bars.
I.e.: if the prices are very "distant" to the 20-p. mov. avg. you should except a correction (the probability increases each bar), that may start with a "violent" movement or confirmed by the "lighter" movement of the last 2/3 bars.
In the PAX pictures, there a no strong retracements because prices are increasing steadily: the 20 moving average seems to accompany prices.
L'OREAL (SHARES)
Comment – long from February/March 2016. Clear target in zone 185-190 (see RSI). The decrease of RSI and the support of 50-p. mov. avg. in december 2017 have averted a worsening of the technical framework. Now we are in an oscillating period (use both 20-p. and p-sar for estabilishing levels). Maybe a short period will come soon
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