FTSE Moving Average Trading System

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Very similar to the 1 day moving average re-test concept but this uses a 60 period simple moving average on the FTSE 5 minute chart.

The concept behind this is that the FTSE likes to re-test certain areas the price has travelled before. This has been shown several times on this site by the articles on the 1 day moving average and the recent impulse bar article.

In this case the FTSE likes to test the 60 period (5 min chart) moving average “once” a day. As you can see in the chart below, some times this happens at the open; sometimes on a retrace and (my favourite) sometimes the price just moves sideways until the moving average catches up.

Naturally, this is very simlar to the 1 day moving average. A 60 period moving average is not near a 1 day moving average and not quite a quite as a half day moving average but I think it works very well and definitely worth a look.

As with all these things I would use it as a guide. As an example; this morning I was tempeted to go short on a break of the previous day’s low but the 60Ma was someway above so I decide to wait for at least a morning of sideways period. As it turned out It retraced and bounced 30pts from where I would have entered. An before you ask, would 30pts have been enough to stop me out? Yes it would.

Obvioiusly it is possible not to benefit from delaying a trade entry but in my opinion you can’t lose any money if you are not in a trade so it is always a better option than making a loss.

Take a look and see what you think.


Moving Average

One Response

  1. Nestor Hardison says:

    It’s becoming more and more difficult to separate the real info from the noise, but I see you’ve got some very helpful info here. Trading is hard enough without being misguided by false experts. Thanks for a very interesting site!

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