If the trader uses as period three-digit number, he/she commits fewer transactions, but these transactions will be more accurate (especially if he/she sells the older graphics), but if a trader uses the small numbers for the period, he/she makes more deals, but signals can be less reliable. As you can see, the strategy strives to the balance.
The most famous strategy based on MA is its crossing by the price. Traders use trend and values of the next correction as a filter. For example, if a trader set a trend direction (as an example — ascending), it will implement only the trend signal indicators (when the price breaks the MA curve bottom-up).
The indicators such CCI, RSI, Stochastic etc. are stochastic. An ordinary strategy based on oscillator is the following: buy when the indicator curve breaks through the curve its lower specified line bottom-up, and sell when the curve crosses the upper line from the top down.
Alex Podgydaev
3/22/2017 23:00
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