Tuesday, 6 November 2018

A Simple Retracement Strategy

This simple retracement strategy is very effective and easy to apply.

We only using two standard moving averages, the 20 and 50 days. Going long when the faster one is above the slower one and visa versus for a short position.
Trading the moving average cross-overs are normally to late, as the price has already advanced in a certain extent. The second best option is to wait for a retracement back to the moving average. Finding stock that has retrace back to the fast 20 day moving average and trade them in the direction of the underling trend, the slower 50 day moving average.  Pullbacks to the 50 MA also gives good entry points.  Going long at the blue circled arias and short at the red circled arias.

Current stocks trading close at the 20 day moving average:

Keep trading simple and do not over analyses with to many indicators. 

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