Market Indicator- 5-10-20 Moving Average Signal


We have examined a few breadth indicators over the past few weeks, but you can also use a simple concept such as moving averages to get you in and out of the market. Ideally, the best system would use a combination of market breadth and trend to indicate the prime trading zones. For instance, you could apply this moving average concept with a breadth thrust signal to support the signal.

This indicator uses three simple moving averages; 5 period ma, 10 period ma, and 20 period ma. When the moving average are in proper positions 5 > 10 > 20 you get an entry signal. I've also applied my standard 5 ma < 10 ma as an exit parameter. You could use this signal to tighten stops on all positions and/or take profits.

The green up arrows would indicate the trading zones, while the red down arrow would be an exit alert.

This is not an indicator I use on a regular basis but I was looking for a concept I could easily illustrate to people who were curious about market timing.

You can find the shared layout in StockFinder under "PatientFisherman_3TrendSignal".

1 Response to Market Indicator- 5-10-20 Moving Average Signal

February 17, 2012 at 3:15 PM

dc here is a site that evaluated the 5-10-20 x-over as well as several other setups that may be of interest:

http://marketsci.wordpress.com/2009/12/02/roundup-simple-indicator-ytd-review/

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