Study Guides
Study Guide: Moving Averages

 

Moving Averages for Trend Identification and Timing Entries:

Chris explained determining the “Longer Term Flow” of a stock using Longer Term Moving Averages.

-      Longer term moving averages show overall direction.

-      Establishing a longer term trend makes the MACD signals more reliable.

-      Chris accomplishes Trend Identification with 2 longer term moving averages.

200 period, in green, of an simple moving average.

49 period, in purple, of an exponential moving average.

Using Shorter Term Moving Averages for Timing Entries:

-      Shorter term moving averages help me with timing.

-      Many traders have many different configurations of their moving averages.

-      Chris has found the 9 period EMA, and the 20 period SMA work best for me.

-      Using crossovers of 2 moving averages to time an entry works best with 1 EMA and 1 SMA.