Moving Averages Fakeout Trading Strategy. http://www.financial-spread-betting.com/course/technical-analysis.html PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! This trading strategy utilises moving averages to spot false counter-trend moves (fake-outs). We have 3 moving averages; one is a 50-period, another is a 30-period and the third is a 14-period. Instead of being based on the close these moving averages take the average of the pivot point (typical price) of each bar i.e. Pivot Point = (High+Low+Close)/3
This is a pullback trading strategy. What we are looking for is to get on the end of a trend as we generally do with moving averages. We have USD crude oil chart on a daily timeframe. The moving averages must be in the general bull mode. The second criteria is that the price has to come back and tag that 14-period moving average but not cross the 30-period moving average. This is a momentum type play. What stands out in this moving average strategy is the use of pivot points as opposed to bar closes for the moving averages but this doesn’t change things much except for perhaps some smoothing of the averages. In reality the closing price of each day is more important as this is the price that all parties settled at the end of the trading day. But for intraday charts utilising pivot points is a good idea. On a daily chart you can probably use it on a smaller timeframe. Interesting, I like it but needs a bit of refining with the stops.