I will start with the 20/50 weekly ma cross for indices.pretty good record.I accept that a trader should keep his best for himself and himself alone,but does anyone have any others they can/will share?

Listen to karl denninger cream his pants as he describes how you could beat the so called pro money managers
http://www.tickerforum.org/cgi-ticker/akcs-www?post=39911

anyone raise me?

Great find thanks. I've been playing with 10/20 day averages recently, they seem to work for indicies, stocks and commodities with good volume.

www.iii.co.uk has good free charting tools btw.

One long term indicator of general economic health is the number of IT jobs available - check out the chart on this site: http://www.jobstats.co.uk/index.html

Many IT jobs are short term contract positions so it's much less of a lagging indicator than the general job market.

I think overlaying the FTSE chart on this chart would be quite interesting...

"One long term indicator of general economic health is the number of IT jobs available "

I think the tech boom and the corresponding IT jobs boom give a corrrelation that you wouldn't find in other booms.

When you backtested this to confirm his numbers, did you

1. Use Dow or FTSE or some other index
2. Take into account trading costs
3. Take into account yield
4. use the BOE base rate for when your money is in cash

Just wondering, as I am currently doing this with the FTSE, so it will be good to compare numbers

I would only do this trade on indicies such as the FTSE 100/250, or large caps with good yields (I'm thinking banks, BA, M&S, Vodafone, utility companies etc.).

I'd trade at least 2 grands worth of each to minimise charges. I prefer ETFs rather than individual stocks as there's no stamp duty and the risk is reduced compared to holding individual stocks. However, my favourite iShares ETFs haven't been going long enough to have sufficient data to chart the 20/50 SMA in iii.

I'm trading in my SIPP, with at least 20 years to retirement. Unfortunately with this method there are times when you'd be mostly in cash. My SIPP only pays around 1% interest. However in a downturn I would consider switching some funds into an inverse ETF or gold. Oil also seems to chart well using this method, so could be a good candidate the early stages of a downturn (like this year!).

The biggest problem with this method is that by the time the averages crossover, the stock may have soared. For that reason I'd only buy at a price near the crossover point, and I'd not worry about missing the boat on the odd occasion.

Slow stochastics 39,1 over 50 - Buy/hold

Slow stochastics 39,1 under 50 - Sell/short

I m not so sure. I think every part of every business nowadays needs IT people, not only the IT sector. SO if the economy and business is expanding then more IT jobs will be created...I dont know, just that is my logic. I have heard other people saying that the IT sector will suffer in the coming recession(s).

MACD does it for me (ETFs investing), with the slow stochastic as a confirmation (often earlier) signal. Wish I had paid more attention in the last few months as would have got out and back in again with a nice pop. Investopia.com and Stockcharts.com have some good info on technical signals.

Why are they called stochastic? Are they random?

While this 20/50 rule is pretty good another problem is that most stocks rise and fall at the same time - is there anything else that we could be usefully trading for the next 6 months+? I can't seem to dig out some long term gold/gilts/bonds data from iii, and the ETFs haven't generally been in business long enough.

Normally I'd do some short term commodity trading or something, but nothing catches my eye of late except long oil, but oil trading looks scary .

sorry noel,not a TA historain.they aren't random,they are worked out by big computers with formula...thoguht that might appeal to you.

if it's pension money,I'd jsut leave it in cash and let madame deflation do her work.gilts are good.

Why are they called stochastics?

Who knows, email George Lane and ask him... He developed it.

Perhaps its a misnomer. It would hardly be the first time a word in the English language has been called something else. Was it not Bertrand Russel, who said that words, spelling and grammer would be the death of language...or something like that.

Find out what it does, look at the maths, what it does is what it does...Naming it a flying cat, a UFO or stochastics is not going to change its function in the context of TA. Many indicators have different names but yet all do the same thing.

Indicators are only a quater of a system if even. It like a road sign doesnt encompass the whole journey, its only a sign.

"Find out what it does, look at the maths"

Stochastics in Maths is something completely different - hence my question

http://en.wikipedia.org/wiki/Stochastic

I know that stochastics is non-deterministic,however, like I said it is a misnomer. However, by looking at the maths in the TA stochastics indicator you will know what it does and its function. I m just saying that whatever it is called and whoever christened it by that name does not change the calculations and functions in a TA context. So I dont know why it is called that, but it is a misnomer. I dont use it personally. I prefer indicators that dont dilute the raw data as much, more pure price I prefer. There is too much lag on it for me.

A better explanation here:

http://en.wikipedia.org/wiki/Stochastic_oscillator

Probably, judging by my investment performance!

I use the slow as a useful confirmation but would not trade off it.

Re. the comment on ETFs - most do have sufficiently long history for the intermediate term. Many of the MACDs for the energy ones look good for now. I would generally not use it for the short/intermediate term for faster moving securities (e.g. covered warrants) though as things often move too quickly.

The problem is that the ETFs (except for oil) haven't been around long enough to chart weekly data (well at least in iii). For the 20/50 week trading strategy to work it really needs 5 or 10 years worth of data.

As far as trading energy goes though, I agree that oil and nas look quite bullish. I've just sold out of the FTSE rally as I think it could run out of steam and I don't like trading against the medium term trend (which is clearly down). If I wasn't going on holiday next week I think I'd go long energy/short FTSE while I'm waiting for the 20/50 averages to crossover on all the stocks I'm watching.

You could use a proxy for an ETF maybe. After all the ETFs are mostly a form of proxy themselves.

DOW appears to have failed into that 11,750 resistance area again today. Unless it breaks through, or even only by a couple of hundred points, I still think we're heading lower. Perhaps a vain attempt at a spike up before it collapses in around 2 weeks time. That's my punt for now.

Hey RK, you should start thinking about setting up a signal service on here. You can keep grow your tarding account and use the signal service money for sex, drugs and rock n roll, I agree, I have been putting together a longer term system all week, well over the last few months actually..but been working on some loose ends this week. Still not sure how to manage the money and trades, as have many options, but I have sorted out the entry and exits. I ll post it soon, to get your opinion. Its giving me some nice shorts on the DOW, FTSE etc around the levels you suggested shorting. Thumbs up. It is giving an imminent signal to short soon at this moment.

Cool! Well I've never been much good at drugs or alcohol but the sex and rock and roll sounds good! Good to see your signals are saying a similar thing. If you have any ideas on how to raise around £20mill to start a hedge fund let me know won't you? I reckon it would take that much to make it worthwhile and it would avoid having to post every trade and face the public ridicule and humiliation on the duff ones.

FAO traders out there:

Found this on the "Mr Mortgage" site.



http://mrmortgage.ml-implode.com/2008/08/2...big-is-brewing/

FRE/FNM and LEH and XLF ticked up for most of last week. Perhaps take care if you have any large positions open until this resolves itself (unless you're feeling especially gung-ho of course).

Anybody else have a view?

I'd recommend martin armstrong's pi cycle.

Google it,it does seem to be fairly reliable.

I've now set up a pile of stocks to look for the 50/20 day crossover. I would think we're someway off the good buy signals appearing for most stocks, although GlaxoSmithKline looks interesting .

Is anyone tracking the pharmaceutical/biotech sector, as I've been hearing various recommendations on it recently. Legal & General also have a really cheap healthcare fund (0% initial fee, 1% annual charge) so I wonder if this will be good to buy if we have another market wobble in the next month or two.

One of the stocks I've been following, Marks & Spencer, has just crossed the 50/20 line. However it did it a few months ago but didn't really go anywhere.

http://uk.finance.yahoo.com/q/ta?s=MKS.L&a...0&a=&c=

Not sure if it's worth a gamble or not, the outlooks not particularly good for retail, and I'm sure this won't be the bottom for the share price.

Don't forget KD specifically said the 20/50 WEEK not DAY, since you're likely to get whipsawed more often if you try using the shorter averages. i.e. it is used to get you into a long-term trend not to get you in at or near the bottom. Some of the charts like Yahoo seem to only have days not weeks, so you'd have to use maybe 100/200 days to give you a better approximation.

I've traded AZN a few times between the 2000/3000 areas and it looks to have bottomed in March and fits this criteria nicely. (Not a recommendation!) but up nearly 50% since March.

M&S is still showing a downtrend on 100/200 day and they haven't crossed over yet, so using the long-term crossovers I would suggest it is still a long-term wait and see, which ties in surely with the fundamental view on retail sector/economy. If you're a long-term pound cost avge. type investor then perhaps tucking some away at lower prices makes sense though.

Have you set them up in some automated way? or do you have to look at the charts one by one?



It's funny you should mention this. The first ISA I ever bought was the Legal & general Health & Pharmaceutical fund, I put in £500 in 2001. The value today is £473, for a 7 year investment it's pants. It went briefly to about £510 just after I got it then it dropped. It's spent most of the time at about £440. I've never sold it, to remind myself that things do go down. The recent gain it has made is more due to dollar exposure than the stocks within.

I would not use the 20/50 week for stocks at all.It's ok for indices normally and maybe use in conjunction with some stock specific indicators but thats it.

individual stocks can be hit by any number of one off factors.for soemthing that volatile I would look for shorter term indicators.

I've not found a system that can automatically tell you when crossovers happen. I now have a huge list of stocks I'm watching. This method is long term, so you only really need to check the charts every month or so.

While I wait for my favourite blue chips (BA, BP, HBOS etc.) to crossover I've been hunting for other likely stocks. To find suitable stocks I've used iii's stock screener to find mid-cap stocks with a good yield which have increased in value by 10% over the last 6 months. This seems to have pulled out a fair number.

I'm currently watching the following, which may crossover before the end of the year:

Dimension Data
Halfords
Logica
Ashtead Group
Misys
Henderson Group
Investec

DYOR etc. Good luck!

I've got a few links saved in my explorer favourites of charts with the MA's on, obviously this updates whenever you reload the page, this is about the best way I've found so far.



I spend time looking at the largest gainers and fallers in both indexes and sectors, I try to do it each day, then it's down to my memory to try and remember ones that keep appearing and any I like the look of I add to my virtual portfolio, so I can remember them better. It's a bit hit and miss but I've had some luck.