Thursday, July 24, 2008

The 816 cross

Boy, that Clueless!. . . now he wants to add entry conditions to the Clueless 20 system. Okie, dokie little buddy. . .on the way. In the meantime, I ran this little test yesterday before Clueless changed horses and suggested a 8/20 cross based on John Carter (with whom I'm not familiar).

I frequently employ systems using 8 or multiples thereof as those systems seem to have an uncanny ability to produce a trading edge. Based on a few thousand hours of testing here's a couple keepers that you can set up on your own. . .my gift to you:

An 8 period ADX on 1 minute bars to use as an EXIT signal: incredibly reliable for scalpers using 2 to 5 minute bars. Exit when the ADX goes from 45 degrees up to 45 degress down.

A channel composed of the 8MA of the high and an 8 MA of the low. Set it up. . .and use in 5, 10, 60 minute and daily bars. Can be used for reliable entry and exit signals, especially for 11:30 AM (PST) breakouts on 5 minute bars.

And then there's this little crossover system using the 8 and 16 period MA in various time frames. I find a straight 1:2 ratio produces the most robust results for index based ETFs as well as XLE and XLF.

As usual, no stops are applied to the 816 system as published, but if there's any interest in pursuing the system in more detail, I'll test some entry conditions and stop loss options in future posts.

1 comment:

Cucca said...

Actually, I "believe", Carter uses the FIB's 8 and 21's, unfortunately, for the life of me, I can't remember if he uses the Simple MA, or the Expontials, it would probably make a difference (hahahaha, like, a LOT). Personally, I don't like MA crosses, to much lag time.