Hi just wanted to know if anybody has used the double cross over moving average method, using a 50 day and 200 day MA to generate buy and sell signals with any success.Or any other MA average techniques used by forumites to trigger buy and sell signals.And where can one get hold of the right charting tools to do this.Thanks.
I wouldn't necessarily stick to 50/200dma x-overs to the exclusion of any other period. Some shares work better with a shorter period, others longer. Keep in mind that MA x-overs are even more lagging than Price/MA x-overs, so I assume you want to get into a trade and stay there for a while. Back-testing might give you an indication of what works best for a particular share. I'm sure that many of us use this method and many others (including coin-flips and dart boards), to convince ourselves that we're right once we've decided that a certain share must be bought or sold . . .
a 200 MA on the daily chart is the average of one year of data. So unless your time-horizon is multi-year investment, it's going to lag what's actually happening by a long way. The 50/200 cross is often used to indicate a bull or bear phase for a share or an index. Don't use the MA crosses as buy or sell signals. You can also just use the direction of a 26-period EMA on the weekly charts to give you an indication of what the primary trend is.
I have found that when a 10 day EMA cross upwards through a 30 day EMA it sometimes gives good entry points. I do not use moving averages crosses as selling points because by the time that the averages cross usually the price have declined so far that profits are minimized. You can find the charts if you click on: find or trade shares, enter the share name, quote, and click on the price chart option on the right hand side of the page.