|  JUN 1989

Simple moving average crossover by Peter Aan

Simple moving average crossover by Peter Aan Editor's note:In this issue, Peter Aan reports on the first of his tests of different trading systems. He begins with probably the most widely known trading system. General Description: Trend following, always in the market. Originator: Unknown Rules and Formulas: The moving average crossover method calculates two moving averages, each based on a different number of days of trading data (Figure 1). When the shorter-term (fewer days) average crosses above the longer-term average from below, this is a buy signal for tomorrow's open. When the shorter-term average crosses below the longer-term average from above, this is a sell signal for tomorrow's open. To compute a simple moving average (MA) of the closes, take the sum of the closes for the most recent ""n"" number of days and divide by ""n."" For example, a 3-day MA is calculated in the following manner: ...

by Peter Aan