[permanentjaun]

Here's my point. MA's absolutely follow price in the direction. They don't necessarily diverge. In ranging and trending markets they still follow them. Do they lag, yes. Do they predict, no. But, are we concerned with predicting movement or following it? I would say we want to follow it. It's similar to playing breakouts. You can predict that a currency will break a channel and begin a new trend or you can wait for it to confirm a breakout and then enter. Is that not a certain bit of lag as well?

You argue that MA systems only last a few months at most before failing. I can't understand this. MA's have been following price ever since they were conceived.

I started the thread on this idea and the idea that the success in MA automated trading is finding an efficient time frame, period of MA, type of MA, and strategy to analyzing what its showing. I noted that I believe markets are always moving in that we can't designate a ranging or trending market. This is because of time frames. I could argue GBP/USD has been ranging since 1985 on a monthly chart. Or I could say it has been trending up since the 10th of october on a 2 hour chart. Which is it then? Ranging or trending? It's all relative.

My idea is that automated systems will always need us, yes. What works on a 4 hour chart today may not work the same in 4 months. The idea is that we may apply the same strategy, such as the Open/Close MA strategy, but alter the variables of time frame and period on the MA's as the market shifts. Perhaps playing a 20/21 WMA open/close strategy on a 40 minute chart works for a few days and then begins to fail. Therefore you take a look at the market and decide to shift the strategy to a different currency or just change the time frame to 2 hours and a 35/36 WMA open/close strategy.

Do we not do the same thing for manually traded systems? Even price action systems? Do you play the breakouts on a 20 minute chart or a 4 hour chart? It's personal preference and sometimes is more obvious on one chart compared to another. You adjust your exit strategies accordingly. Someone looking for 400 pips off a breakout on a 10 minute chart isn't practicing safe risk management.

If you say the MA is lagging too much, make it faster and take a look at a longer chart time period so the movement is more substantial and enough for you to exit with your pips.

Why am I putting up such a fuss about this? It's because I believe highly in finding efficiency. If something is lagging, what chart is it lagging on? If it's producing too many whipsaws, what chart is it whipsawing on? Those are signals to me that I'm not using the efficient settings and I should reconsider the variables.

I'm trying to figure out why MA systems, which follow price, have failed in the past. I admit they fail, but do all of them fail? Many don't know the rituals of Buddhist monks in Tibet, but that doesn't mean they don't practice them and lead successful lives in their own sense. Therefore, I can't imagine it is impossible to create a successful automated system so long as it is monitored.

Why bother with an automated system? I could sit here all day looking at the charts and manually trading the system. I want automated so that my emotions are out of the equation. That is already a huge benefit to my investing. Secondly is to make trading multiple pairs, even just the majors, less time consuming in terms of my sitting in front of the computer.

Sorry for being so stubborn.

Besides those thoughts, I've had this one. Has anyone tried programming a trailing stop loss where it closes a trade if the currency closes in the loss? For example you buy at 100, it races to 200. You have a 25 pip trailing stop loss. The currency falls to 160, but closes at 180. Then it runs to 225 and falls to close at 200. It would trigger the stop loss at 200. Anyone tried this? Matt