#2) Moving Average Crossover
This system is a simple system, it can be used in day trading with smaller time frames, like 15min, 30min, to 1 hr charts, or in swing trading using 1 hour, 4hr, or daily charts
Entry Rules: Go Long, when the 7 SMA crosses the 14 SMA upwards and continues to move through the 21 SMA, buy.
Go Short, when the 7 SMA crosses the 14 SMA downwards and continues to move lower through the 21 SMA, take a short spread bet position.
Don’t try to anticipate the signals, and look at your charts historical behavior when these three Moving averages have crossed, what the out come has been. This will help you identify, when applying this strategy to a different market, if this strategy works on the current market you are trading. If you want earlier signals you can decrease the 7 MA, and if
Exit Rules:
When the 7 SMA goes back and touches the 21 SMA. Don’t forget to apply your money management rules.
Advantages: This is a simple strategy, easy to set up with many Spread Betting brokers and does not need any calculations or other studies. Can produce very good results during strong market moves, the system also can be easily programmed and traded automatically.
Disadvantages: System requires periodical monitoring, as it can give false breakouts. SMA is a following indicator and can give a late signal or the current price bar has been fully formed and closed. In choppy markets it can give false signals but in trending markets this will keep you in trend.
Here are three examples of the strategy above:
DAX Moving Average cross Spreadbetting strategy
FTSE Moving Average cross Spreadbetting strategy
Silver Moving Average cross Spreadbetting strategy