The Power of Moving Averages When Trend Following
Too many over look the power of moving averages. I use them as filters which mitigate the number of trades as well as details where I stand in the markets. I will never attempt to go long when the indices are below the 200 EXMA. When I look for retracement trades…want to make sure they are not below a long term moving average if I am going long.
One can also implement a long term trend following strategy using long term moving averages such as 70,150,200 for stocks or any other trade able idea. I add filters such as number of positions allowed…ATR stops…and ranking of markets.
The point I want to make is that adding moving averages can be a tool to lower the number of trades and filter out weaker trades..
Past performance is not indicative of future performance