This system is mainly used to find markets which should be avoided when trading with technical indicators because they are often unprofitable. Three oving average system helps to find entry and exit points which could be profitable.
This system consists of 3 moving averages with different time periods. The averages could be called as fast, middle and low. The length of the averages could be 5, 21 and 63 for example. Entry is signaled when he middle moving average crosses the long moving average and Exit is signaled when the fast moving average crosses the middle moving average. You should go long when the middle average crosses the above slow moving average from below and fast moving average is above the middle line. You should go short when the middle moving average crosses to below the slow moving average from above and fast moving average is below the middle moving average.
