A simple variation of the moving average by Peter Aan
General description: The Moving Average Direction System is trend-following; always in the market.
Originator: Peter Aan
Advantages: Profits from most significant trends; entry technique eliminates some false signals.
Disadvantages: Must wait for close for entry signals; optimal stops somewhat loose for small traders; whipsaw losses in sideways markets.
Rules and formulas: Uses a simple moving average (MA) of closing prices. To compute a 30-day MA, for instance, total up the closing prices for the most recent 30 days and divide that total by 30. Repeat that process every day, using only the most recent 30 days for each calculation.