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Whale Trading

MA-60 Trend Following Strategy: Swing Trading with the Daily 60MA

In this article, we will cover the MA-60 Trend Following Swing Strategy, which places the Daily 60MA (or a similar long-term MA) as the central axis.

In the previous article Moving Average Strategy, we summarized the general trend following idea of:

  • "Defining the trend with MA"
  • "Riding the pullback/breakout within that trend"

In this article, we will focus on a very simple but structurally robust framework among them:

"Long only above the Daily 60MA, Short/Neutral only below it."

The diagram below shows:

  • Top: The big picture of taking long swings above and short or neutral positions below the Daily 60MA.
  • Bottom: The structure of zooming into the detailed entry/exit zones on the 4-hour chart for the same section.

The key is to divide roles into:

  • Daily 60MA = Filter to decide "whether to view this asset as long or short now"
  • Lower Timeframe = Space to catch the actual entry/exit timing

1. Why 60MA? (Role and Philosophy)

There is no magic in the number itself. You can use 50MA or 100MA.
However, in this article, we will fix it to 60MA for explanation purposes.

Generally:

  • Daily 50~60MA:
    • Means "average price of about one or two months" to medium-term swing traders.
    • Visually shows well "whether this market is in a medium-term uptrend or downtrend".
  • Too short MAs (10, 20):
    • Are more sensitive to noise.
    • Are good for "entry timing" but somewhat shaky as a "major direction filter".

The philosophy of the MA-60 strategy in this article is simple:

  1. Change the major direction only with a slow criterion.
  2. Adjust entry/exit within the direction with more detailed criteria.

So we use the role division of:

  • Daily 60MA: Direction Filter (Long/Short/Neutral)
  • 4H/1H Chart + Short-term MA/Candles/Patterns: Concretizing Entry/Exit

2. Filtering Direction with MA-60

First, organize "whether to look for longs, shorts, or just rest" based on the Daily 60MA.

2-1. Basic Filter Rules (Example)

  • Long Perspective (Bullish Bias)

    • Daily closes are mostly finishing above the 60MA.
    • 60MA is sloping upwards.
    • Trend Indicators like DMI/ADX, MACD are also supporting the uptrend.

  • Short Perspective (Bearish Bias)

    • Daily closes are mostly finishing below the 60MA.
    • 60MA is sloping downwards.
    • Trend indicators are also supporting the downtrend.

  • Neutral/Sideways

    • Price frequently crosses up and down the 60MA.
    • The slope of the 60MA is flat, or the box structure based on Support & Resistance Basics is clear.

You can see this filter as a device to decide in advance "which direction I will actively bet on now".

3. Multi-Timeframe Structure: Daily 60MA + 4H Entry

The MA-60 strategy is premised on multi-timeframe analysis.

As seen in Timeframes:

  • Higher Timeframe (Daily): Define Direction/Environment
  • Lower Timeframe (4H/1H): Entry/Exit Timing

It is common to divide them like this.

3-1. Long Swing Example Structure

  1. Check Environment (Daily)

    • Price is moving above 60MA.
    • 60MA is sloping up, trend indicators signal an uptrend.

  2. Set Interest Zone (Daily)

    • Price corrects near the 60MA, or
    • Check the zone where an important support level based on Support & Resistance Basics + 60MA overlap (Confluence).

  3. Search for Entry Signal (4H)

    • Zoom into the 4H chart for that zone.
    • Based on Candle Patterns, Chart Patterns:
      • Long lower shadow + Rebound candle
      • Breakout of top after small box
      • Upward breakout of small wedge/triangle Use these as entry trigger candidates.

  4. Set Stop Loss/Target

    • Stop Loss: Recent swing low on 4H or a certain % below Daily 60MA.
    • Target:

The diagram below shows:

  • Top: Flow where price corrects and rises again above Daily 60MA.
  • Bottom: Example marking specific entry/stop loss/partial profit taking zones on the 4H chart for the same section.

4. Stop Loss & Exit: How Long to 'Hold' Based on MA-60

From the perspective of the MA-60 strategy,
exit and invalidation are also viewed through two lenses: Daily 60MA and Swing Structure.

4-1. Partial Exit (Taking Profit) Ideas

General example:

  1. 1st Profit Taking:
    • Near recent box top/resistance on 4H or Daily.
  2. 2nd Profit Taking:
    • Zone moved by about 2~3 ATR based on ATR.
  3. Remainder:
    • Hold until Daily swing structure breaks or
    • Price closes below 60MA for several consecutive candles.

Doing this makes the operation closer to:

  • "Surely taking some profit in the entire upward section"
  • Rather than "guessing where the top is".

4-2. Invalidation (Strategy Void) Criteria

Long criteria example:

  • Price clearly breaks below the Daily 60MA.
  • The structure of "higher highs and higher lows" based on Swing vs Correction is broken.
  • DMI/ADX, MACD, etc., on Trend Indicators start to tilt towards decline.

→ At this point, clear the remaining position,
and switch to neutral or short perspective until looking for longs again.

5. Pros and Cons of MA-60 Strategy

5-1. Pros

  • Reduces Decision Fatigue

    • Thanks to the filter "Long only above Daily 60MA, Short/Neutral below", you are not exhausted by changing directions all day.

  • Helps Reduce Big Mistakes

    • Reduces the habit of constantly trying longs in a long-term downtrend.
    • Conversely, mitigates the habit of constantly catching shorts in a long-term uptrend.

  • Fits Well with Multi-Timeframe Structure

    • Direction on Higher (Daily), Entry/Exit on Lower (4H/1H). It is a form that is good to explain structurally.

5-2. Cons and Cautions

  • Can Be Slow in Early Reversal Zones

    • At the beginning of a major bottom/top, the 60MA may still point to the old direction.
    • If your style is to aim for "counter-trend" in these zones, the MA-60 strategy may feel somewhat frustrating.

  • Stop Losses Can Accumulate in Box/Volatile Markets

    • If price moves in a box shape near the 60MA, multiple small stop losses can occur, just like in the Moving Average Strategy.

  • Risk of Mixing Intuition/Emotion Outside the Strategy

    • If you start arbitrarily ignoring the filter like "It's below 60MA this time but feels good so Long", the advantages of the strategy disappear quickly.

6. Checklist When Applying MA-60 Strategy

Before using the MA-60 Trend Following in practice,
it is good to answer at least the following questions.

  1. Based on the Daily 60MA, is the market currently Long/Short/Neutral?

  2. What pattern or candle structure will I use as an entry trigger on the Lower Timeframe (4H/1H)?

  3. Where will I place the Stop Loss criteria?
    (Swing Low/High, below 60MA, ATR based, etc.)

  4. How many stages will I divide profit taking into, and what are the criteria for each stage?

  5. Is there a clear rule to judge "strategy invalid" when the 60MA bends or price goes below it?

  6. With how much leverage/position size will I operate this strategy within Risk Management rules?

The MA-60 strategy is closer to a:

"Frame" that limits the big direction with Daily 60MA and designs swings within it,

rather than a completed system.

As next steps, we recommend comparing it with:

  • Golden/Dead Cross Strategy (Strategy based on Golden/Dead Cross), which is in the same trend following family, and
  • Other strategies combining volatility, patterns, and oscillators,

to create a trend following combination that suits your personality.