MA’s are lagging indicators and 1 – 5 minute charts are fast moving which is not a good combination. Add in the spread and profits can be difficult to come by. IMHO short time frames should only be used for trying to improve an entry point once it has been decided that you want to place a trade on longer time frame charts. Suitable only or manual trading at the moment until PRT goes multi time frame.
What about using MA’s with a high value period for entry (Average(120) ) and a low value period for exit ( Average(5) )?
Above could make entry on an established hourly trend, but exit could be nimble enough (1M TF) to prevent gain turning to loss … which can often be the case when waiting for a 1 hour bar to complete to trigger an exit!?
GraHal – are you suggesting using the same average periods but on two different time frames. Longer time frame for entry and shorter time frame for exit? If so then 120 hours is 1440 x 5 minute bars and 5 hours is 60 x 5 minute bars so you could just plot 1440, 60, 120 and 5 period averages on a 5 minute chart and see how it works out.
I generally find that sometimes an average combination is in tune with the market cycles and other times it is completely out which is why I don’t use them.
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