moving-average crossover system

moving-average crossover system

After you explain the concept of risk to your brother, he still wants you to develop a trading system. In fact, he has done some reading and is convinced that a trend-following moving-average crossover system is the way to go. He even knows what stock he wants to trade using the system—his favorite pharmaceutical company, High Profit Pharmaceuticals (HPP). You do some initial investigation, and you think that HPP is currently in a trading range. Explain to your brother why you think it would be unwise to attempt to trade HPP using a moving-average crossover system at this point. (Be sure to explain the concept of a whipsaw in your explanation.)

moving-average crossover system

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