I am developing this simple three step strategy for intraday as well as positional trading. The saying is "trend is your friend". My strategy is to ride the trend and involves three moving averages and three time frames - the 5, 13 and 34 period moving averages and the 1 hour, daily and weekly time frames.
Buy the stock if its price is above the 5 period moving average and the 5 period moving average is above the 13 and 34 period moving averages. The 13 period moving average should be above the 34 period moving average. This should be true for all the above three time frames. Initiate the trade if and only if the above conditions hold. Keep a stop below the 34 period moving average or exit position when price retraces to 13 period moving average.
Similarly sell the stock if its price is below the 5 period moving average and the 5 period moving average is below the 13 and 34 period moving averages. The 13 period moving average should be below the 34 period moving average. This should be true for all the above three time frames. Initiate the trade if and only if the above conditions hold. Keep a stop above the 34 period moving average or exit position when price retraces to 13 period moving average.
Buy the stock if its price is above the 5 period moving average and the 5 period moving average is above the 13 and 34 period moving averages. The 13 period moving average should be above the 34 period moving average. This should be true for all the above three time frames. Initiate the trade if and only if the above conditions hold. Keep a stop below the 34 period moving average or exit position when price retraces to 13 period moving average.
Similarly sell the stock if its price is below the 5 period moving average and the 5 period moving average is below the 13 and 34 period moving averages. The 13 period moving average should be below the 34 period moving average. This should be true for all the above three time frames. Initiate the trade if and only if the above conditions hold. Keep a stop above the 34 period moving average or exit position when price retraces to 13 period moving average.