Moving Average Short
This strategy tries to hedge an existing position by shorting a similar security when moving average indicators signal a down trend.
This strategy is a hedging strategy: it relies on a moving average signal to hedge an existing position by shorting a similar security such as a stock market index based ETF. The algorithm is very straightforward: when the signal security price is lower than its moving average of certain period, it hedges the existing long position by shorting a designated short security. All of these are parameterized and can be set to create a specific portfolio.
The following is a list of other possible applications of Moving Averages (MAs).
- Moving Averages Strategy for Equity: The standard MA strategy for various stock market indices or securities.
- Moving Average Short: Use Moving Average as a downside protection by shorting another security similar or related to the underlying security. Another similar strategy is the Momentum Hedge, which utilizes MAs are the downside protection for a momentum based portfolio,
- Moving Average With Signal: Use MAs from another security as the trading signal for the underlying security.
- Moving Average With Two Signals: Instead of merely using one signal, use multiple signals (two signals) to make sure the trends are confirmed.
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