Hey, I got some stats for you.
So MA 100 got tested 38 times since 2010, and this happened:
* Clean bounce : 12 times
* The MA got passed, with little follow up (< 10%), the price stagnated, and then the price went back the other way: 9 times
* Break with follow up (immediate): 7 times
* MA break followed by rapid reversal (like bouncing on it but after passing throught it a bit > 10%): 3 times
* Break MA slighlty, stagnates, then continues: 3 times (case #26 in the screenshot is the 3rd time)
* Bounce, stagnates, breaks: 1 time
Here are all the times MA 100 got tested:
The 3 cases when the MA got slightly broken, then price stagnated, and then there was follow through, in 2 cases the price stagnated for a very long time on the opposite side of the MA before breaking it weakly.
So to sum up out of 38 times the 100MA got visited, the price broke it and stagnated 12 times, and out of these 12 times, only 3 were wins for traders buying the break.
That seems logical. If a resistance gets broken, but there is no follow up the first few days, it would seem very unlikely anything happens. You need an initial snowball to grow a snowball bigger.
But I never backtested the MA100 or any moving average actually, that much. What do you think? The odds of going up are about 1 in 4?
Published at Fri, 22 Feb 2019 22:01:29 +0000