Ask Colin

I was reading the Shares magazine October 2000 and I would like to clarify the triple moving average system. You mention for the Brandrill chart that you buy when the 15-day MA crosses from below to above the 30 day. If one wants to trade weekly does the crossing of the 5-day from below to above signal a buy? What about the 5 and 30 day? Any significance?

I was reading the Shares magazine October 2000 and I would like to clarify the triple moving average system. You mention for the Brandrill chart that you buy when the 15-day MA crosses from below to above the 30 day. If one wants to trade weekly does the crossing of the 5-day from below to above signal a buy? What about the 5 and 30 day? Any significance?

In the magazine, I am always working to convey as much as possible about a subject within the word limits allowed by the editor.

The three moving average system goes long when the shortest moving average is above the medium term moving average, which in turn is above the longest moving average. This signal is usually given when the medium moving average crosses to above the longest one, because the shortest will already be in place. However, there are exceptions from time to time.

The sell signal is when the shortest moving average crosses to below the medium one. Thus the system is slow to get in (wants to be sure there is a good trend), but faster to get out, before too much profit is given back.

If trading weekly price bars the averages become for example 5 weeks, 15 weeks and 30 weeks. Use the weekly close to calculate the moving averages.

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