About moving averages

Investopedia.com I can't recommend this site more highly. Moving averages tell you a lot about how a stock is moving. I use small charts because I trade in and out quickly. Most charts I use are 8, 21 and 55. When I decided I would trade AMZN I watched my bid ask on Qcharts I saw many buying calls and when the split was over puts began to take hold. I watch the spread between moving averages on charts I use. When they start pulling apart (especially the 50 and 200) like AMZN has on an 8 chart starting 6/8 the stock is going down. When they are close together almost stuck together I know a trade is not going to work( see 6/7 on 8 chart), and when they are far apart going down I know it is going to go up (6/13). I always look at the 20 moving average..is it flat, is it moving up or down. I use these averages for almost all my trades. Gaps watch when there are 2 or 3 gaps the stock will generally reverse directions. Read all this until you can quote it by heart on Investopedia.com add it to what GW taught and I can only use what he taught in 1-5.

Hey Darcy,

Do you have a link to the investopedia page you are referring to? There's a lot on investopedia, so wanted to make sure I was on the right page.

Seems like I remember some time back when you talked about 3 MA crosses, like the 5 and the 10 crossing the 20. Are still using that? Seems like I remember it being called the "E" trade.

What other MA do you use lower than the 20 (21)ma? Are you still using the 2ma and the 3ma as Gary taught in 1-5?

1) [www.investopedia.com]
2) [www.investopedia.com]
3) [www.investopedia.com]

S/O used the 5 crossing the 10. This worked for him not me. I basically use the same style except I use larger moving averages. Yes he called it the E trade. He'd tell me how he traded and what to share. He used this trade after reading Technical Analysis for Dummies. I look at how the moving averages are pushing. (UP or DOWN) how far apart they are, and if they match up on the 8, 21 and 55. **In other words is the 20 or 50 moving average on the 8, 21, and 34 close to the same number on all 3 charts if I want to buy a call or put.** (Important to how I trade) I also look at stoch RSI for over sold or over bought. Bollinger bands if they are spreading which means there is volume in the trade. I go to bid/ask when my charts aren't clear on Qcharts because I can see if there is heavy interest in the trade and whether there are more calls or puts (color coded) and it lets me see why the trade is not ready.

I use the 20MA as my support and resistance line. Say for instance if a stock is breaking up and is above the 20MA I look to see how much room it has to move on my 8 first. Either it has room to the top of the BB or maybe the 50MA before it MIGHT reverse. I compare that 8 chart to my 21 and 55 to see if the room to move is close to the same.

I have GW's moving averages on my charts but to tell the truth I don't follow them. I use the red line for overbought or over sold on Stoch RSI.



Edited 1 time(s). Last edit at 06/15/2022 06:24AM by Darcy3.

Today @ 10:02 looking at the ZOOM chart my moving averages on my 13, 21 and 55 charts are saying stock could go to 110 before it would pull back but my 8 chart has no confirmation of the trade unless the BB's start to open up. This is what I look at the moving averages and where they hit and the direction of the stock. Wouldn't I trade ZM right now...not until I get confirmation on my 8 chart. Yep going to 110...but will take a strange path to get there. Not a trade yet.



Edited 3 time(s). Last edit at 06/15/2022 09:34AM by Darcy3.

Thank you for posting this Darcy. When I look at Zoom today I dont see any trades or atleast as of 11:44 although a put may be forming in the next 30 mins or so.

flsupraguy I bought at 10:56 5 109 calls for 3.30 and sold out from a GTC @ 11:32 for 4.10. On the 8 chart the 20 moving average became support. I really only asked for a .50 move but got .80.



Edited 1 time(s). Last edit at 06/15/2022 01:06PM by Darcy3.

Look at ZM at 242! LOL...but I had to do a GTC because I wasn't going to be able to watch charts. Could sell now for 5.60...but I am happy in Seattle1

flsupraguy hope you did your PUT. Did one after it fell below the 200 moving average on the 8 chart. (6/16) Waiting to see what it does off the 20 on the 8 chart. I trade short charts...8, 21, 55 seldom look at anything more than that. I just like to make my money and run. Patience is not one of my better traits. S/O use to laugh at me because I always saved change. But that was how I financed my trading when I first started with $2,500. I get to a certain amount in my account and transfer what I call over runs to a savings. If it goes the way it looks like to me it is a $2 move. Little tinee tiny candles do bother me some but we'll see. Gotta leave soon so if nothing in a few minutes I have to shut down.