GENERATING SIGNALS USING DOUBLE CROSSOVER METHOD

USING DOUBLE CROSSOVER METHOD TO GENERATE SIGNALS

This method makes use of two moving averages ;the short moving average and the long moving average .The short moving average analyse short term trend and the long moving average analyse the long term trend .The relationship between these two help in ;providing important signals ,confirming preliminary trades ,identifying cycles among others

One should be a short  term moving average and the other  a long term moving average

TIME FRAME TO USE

Any time frame can be used depending on the requirements of the trader but one should be short term moving average and the other the long term moving average .Professional traders usually use 30 day moving average as the short term moving average and 60 day moving average as the long term moving average .

CREATING SIGNALS

A BUY SIGNAL (CALL) is generated when the short term moving average crosses a long term moving  from below .A SELL SIGNAL (BUY ) is generated when the short term moving average crosses a long term moving  average from  above .

The crossing of the two moving averages provide signals which are required by a trader to make profitable trades regardless of the asset .This  rule of thumb apply to most assets traded on the financial market

CONCLUSION

The DOUBLE CROSSOVER METHOD is used to provide important signals and also is used as a confirming tool ,it is used to confirm preliminary trades  and also to identify cycles for the asset

THE DOUBLE CROSSOVER METHOD should be used together with price chats  to make effective trades

HAPPY TRADING