I was searching the web for basic algorithmic trading concepts and came across the following article. http://www.investopedia.com/articles/active-trading/101014/basics-algorithmic-trading-concepts-and-examples.asp
There is a section of the article which refers to simple trade criteria.
"Suppose a trader follows these simple trade criteria:
- Buy 50 shares of a stock when its 50-day moving average goes above the 200-day moving average
- Sell shares of the stock when its 50-day moving average goes below the 200-day moving average"
Does this seem like a reasonable basic trading algorithm strategy? If not, can you point me to a better one?
I find it strange that they are suggesting to buy when the stock is up, and sell when the stock is down.