hi,
seniors pl enlighten me:
Scrip: mcdowell, Intraday:
EMA of higher period crossed EMA of lower period. at the very time around 2.10 volume grew too high and within 50 mins the price was up Rs.10.
was this cross called golden crossover or something like that? does this happens always and can we profit from this? if so how to observe it?
p.s.
l dont mind if my observation is too childish if so,kindly ignore the query and excuse.
From http://www dot investopedia dot com/terms/g/goldencross.asp
What Does Golden Cross Mean?
A crossover involving a security's short-term moving average (such as 15-day moving average) breaking above its long-term moving average (such as 50-day moving average) or resistance level.
Hope this helps as far as the definition is concerned
does this happens always and can we profit from this? if so how to observe it?
p.s.
l dont mind if my observation is too childish if so,kindly ignore the query and excuse.
This happens as and when there is a heavy demand (or heavy selloff-
For What Does Death Cross Mean?
A crossover resulting from a security's long-term moving average breaking above its short-term moving average or support level.) and this happens in all the time frames.
How can one profit?
There are quite a few strategies for entry & exit plans. Let me give you one of the versions. Let me take 15EMA and 100EMA as example given in the investopedia site.
For a Golden Cross:
Time frame: Any tf 15 min, 30min, hourly or daily, etc.,
Signal Bar: When 15EMA crosses 100EMA from below. This is the Goldern xover bar & it's the signal bar
Entry type: Long
Entry: When the next bar (or the following bars) of the same tf, closes above the High of this signal bar. (Another version is that some prefer to enter as soon as the price trades above the High of the signal bar; they don't wait for the close). but a Close above the High of the signal bar is the confirmation for the entry
SL: Either the Low of the signal bar (Non-discretionary) or the a little below the Low of the signal bar (Discretionary)
Trade management: (again a lot of versions) When the trade moves in favour, Trailing Stop Loss (TSL) is put in at the Entry price; some prefer to add positions if there is volume picking up; some prefer to book profit for a certain part of their positions with TSL at the entry for the reamining part.
For the Death Cross, the trade will be "Short" and the above rules apply accordingly in principle
Signal bar: When the 15EMA (shorter) crosses 100EMA (Longer) from above
Entry type: Short
Entry: When the next bar (or the following bars) of the same tf, closes below the Low of the signal bar. I'm not giving any variations here as in the above case
SL: The High of the signal bar
Trade management: If the trade moves in your favour, ride the trend with TSL
P.S: These trading strategies of using MA crossovers are basically trend based. In a non-trending markets, these signals tend to give whip-saws.
These versions must be utilised on trial and error basis according to one's own risk appetite
If something needs to be added, please do not hesitate to correct me
Thanks
Babu Kothandaraman
