Hi 
What are the 3 coloured lines? Are they moving averages?
Thanks
Hi Kim.
Firstly, I should emphasise that these charts are not my
trading charts as such. They are only a "window" on what is going on generally with the instrument concerned. So, in this case, I am not suggesting using these MA's as some kind of crossover strategy. I don't believe any kind of pure crossover methods work at all.
The idea behind the choice of MAs here is purely that they are ones that are widely followed in the markets in general and tend to "curve fit" well to the price charts and therefore form a good pictorial indication of where things are going whilst filtering out a lot of "noise".
The red and blue lines are 20 and 50 period EMAs and the green dashed line is a 200 period SMA. In the same way as the 3 ducks method that you mentioned (and, as it happens, the general idea behind the Bill William's alligator indicator) when these three lines are lining up in order then it suggests a good trend is in place, but when they are squiggly all over the chart then it suggests a period of directionless consolidation.
I tend to use this on the daily chart to give a general overview of what is the current story. Then I drop to my 4H/1H trade charts for my actual entries. If there is a strong trend then I tend to only go in that direction, but if it is consolidating then I'll go with a signal in either direction.
I hope that doesn't sound too complicated!
