Displaced Moving Average Ribbon

Moving average ribbons are great for visualizing the direction and strength of a trend. They can even be used to visualize possible trend reversals in progress.

Here's an image of the dow30 using an exponential moving average ribbon starting with a period of 3 (EMA3) and going to 15 (EMA15) in increments of 1. I've used transparency on the lines in order to better visualize when the averages coalesce. It is at these coalescing points that the trend's direction may change.

This is a regular moving average ribbon, where we change the period of the average to get the ribbon

Here's an image of the dow30 using an exponential displaced moving average ribbon using a period of 15 and changing offsets in increments of 5. You can easily see when they all line up the trend is strong, and when they start to intermingle, it's a sign the trend may change. A ribbon like this is intended for longer term investing.

This is a displaced moving average ribbon, where we change to delay of each average to get the ribbon

Attached is a simple displaced ribbon strategy I developed. The basic premise of the strategy is simple, when the entire ribbon is in line, it's time to buy. When they are reversed, it's time to liquidate. This strategy expects the asset to be in a bull market. Edits could easily be made to determine the long term trend of the asset and apply the same logic to the short side. The idea here being, don't trade against the trend using this strategy!

As always, feedback is welcomed!
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I've used mvg avg ribbons for many years and think the displaced mvg avg is quite interesting.  What type of "displacement are you using in the above example."


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