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Are there position traders in this discussion group who use a simple
moving average in slower markets such as grains to generate buy and sell
signals?
In the process of developing a trading system that suits my current
situation I have studied simple moving averages. I selected a nine-day
moving average to test with soybeans. I expect to be able to extrapolate
the results to corn and wheat, since their movements seem to mirror
those of the beans. Since the beginning of my test period, using data
from mid-February 1998, the nine-day moving average has generated
seemingly reliable sell and buy signals in the July soybeans. I employ a
simple money management technique that identifies a trailing stop at
10-17 cents above or below the market price to allow room for a market
move without stopping out during a trend. My selection of a stop depends
on the volatility of prices. (Last year I allowed a larger variance to
account for the bigger moves that were occurring within a trend.) These
are slower markets right now, suiting my inability to follow intraday
activity. I wonder if any of you have refinements to suggest to this
system or any thoughts about additional markets where this method might
be applicable.
Also, what method or formula should I use to adjust my moving average
when the nearby contract expires and the next futures contract takes its
place? All my data are in a MS Excel spreadsheet, not on a purchased
trading system.
I monitor end of day results, but rarely can look during the day. Thanks
for any help you may have.--Linda B.
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