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No. of Recommendations: 4
The first one is written by fivesolas, post #29469 FW. It talks about a book written by John Markham that says: BUY when the 15 day Moving Average is above the 50 day Moving Average. SELL when the 15 day Moving Average is below the 50 day Moving Average.

The second post, a reply to the one above, is written by joelxwil, post # 294690 FW. It talks about using three tests in conjuction with the NASDAQ. Here are the results over 5 years of that method:


There are numerous systems and or screens that will work, the key is to diversify, set strict stop loss limits (but let your winners ride), follow the system without emotional involvement, and evaluate the system and make changes as needed.

I am a big believer in moving averages and moving average crossovers. The MACD screen that I use is just that, a 12 day and a 26 day Moving Average crossover. When I look at moving averages, I am looking for stocks that have been down (ie below the 50 day MA or EMA) for a long time (several weeks minimum), but that are moving upward and starting to break through the Moving Average. In many cases, a stock will go up and touch the MA line, and then drop back. That is why I made a rule that I like to see a stock 3% above the 50 day EMA before I will buy it. The other tests that must be passed using my system is the volume increase (40% above ADV) and RSI. Both of these indicators show that a stock has positive momentum, and are confirmations of the MACD and the 3% above 50 day EMA.

Since no system is foolproof, there will be losses. The key is to cut your losses short, but let your winners ride. For example, pick any high tech stock on the nasdaq and look at it over a 2 year period. Imagine that you bought the stock whenever it rose 3% above it's 50 day EMA, and sold it whenever it dropped 3% below the 50 day ema. As you can see, no matter which stock you look at, you would have done quite well. That's why I'm a big believer in moving averages. Obviously they work better for highly volatile stocks (high beta's), but that is what I like to follow.

I think anyone who invests in the market should use TA for entry and exit points. If I had to pick any one single TA parameter to look at, I would definitely pick Moving Averages.

I'm sure the vector vest system and the other systems that were mentioned all worked better than just a LTBH strategy.

Hope this answered you question.


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