Trading Technique  |  DEC 1996

The 2/20-Day EMA Breakout System by David S. Landry

The 2/20-Day EMA Breakout System by David S. Landry Moving average systems seek to capture meaningful trends. Here's a modified exponential moving average system that uses pattern recognition as a filter for entry rules. Technical approaches to trading range in complexity from simple chart-based methods to complex neural network algorithms. As technicians, we are all guilty sooner or later of trying to reinvent the wheel with elaborate technical analysis. We'd all like to find the Holy Grail of an indicator that will make us rich. I have spent countless hours searching for such an indicator, only to rediscover something far less complex. The truth is this: There is no perfect indicator or system that will lead to riches while avoiding all risk. Should you give up? Quite the contrary; the fact is that many simple indicators work well. You can use numerous off-the-shelf indicators and be quite effective as a technician. Let me explain how I rediscovered the moving average and developed a system based on it.

by David S. Landry