My moving average trade today.

Today as the market climbed higher I did a PUT on ROKU using my moving averages. I entered on the 8 chart and just sold out. Bought 5, 89 Puts for 4.55 and sold just a few minutes ago for 8.60. I entered the trade @ 10:47.

Just trying to understand your thought process a bit better. ThinkorSwim allows you to go back and time and replay a trade, so I was able to jump back in time and look at Roku at 10:47am. I looked at Roku at 10:47 and here is what my 8 min chart looked like.



It shows me that 200 (light grey) is just below the 50 (orange line) and the 20 (blue line). The 50 crossed above the 200 a couple candles earlier, and the 20 crossed above the 200 at the start of the day. The 21 min chart was the same, but the 55 min chart shows the 20 and 50 still below the 200. I do see the bearish divergence building on the Histogram and DE line trigger cocked. Am I missing the rest of the story here?



Edited 1 time(s). Last edit at 08/11/2022 02:47PM by RichieRick.

Do you have a money flow? Also BB's? BB's are like moving average envelopes. When the BB on the 8 began a squeeze (day before) I start watching because that stock will pop up or down. I look for these squeezes after the close but not until 6PM. When that squeeze breaks, I start looking for a call if they pop down and if they pop up a put on my 8. I know that sounds crazy but remember I do not hold on to my trades. I do not trade like 1-5 because I buy the month I am in and most of the time I am in until I see a turn around on my chart or I put in a GTC for .50. Yesterday I was able to watch this trade all day, so I held on all day ALMOST selling when the stock rode along the 50 moving average but I didn't because the candles were so small. When I saw the stock pulling back and indicators showing a down I knew it was time to get in using my moving averages which where curving down (not crossing but turning down) I traded using moving averages understand I look at my 3, 5,8, 21, 55 (and sometimes 34) I enter using my 8. BTW GW's Christmas cross (1-5) happened.

So WHY do I look for an opposite signal if a stock in a squeeze off the BB? The OPTION is cheaper and YES I watch the option price as well. For instance a call goes up off the pop up so I start watching when it begins to reach a lower high. The put begins to go up as the call begins to go down. I do the opposite if the pop is down. I also have on my Qcharts a bid ask watch and it is color coded. I watch the bids and asks going into a trade I want to enter. ALSO know this trade would have worked very well off the 8 chart going up using just the moving averages which I did but because of other factors (gaps, Stoch RSI, MACD and money flow) I looked at this as a head fake (breakout) so I looked for going down.

Yes, you can call this a bearish convergence on the 8 because all indicators were going down. Begin looking for these squeezes and since you trade a 233 and daily look for them on a 55 and begin studying their pattern. [www.investopedia.com]

Why did I add money flow to my studies? Charles Payne suggested it. BTW my money flow on the 8 is set to 13,70,30 but on the 13 it is set to 13,50,50. The 13-chart money flow tells me faster that money as leaving a stock BIG TIME. [www.investopedia.com].



Edited 2 time(s). Last edit at 08/12/2022 12:58PM by Darcy3.

Wow!!! Thanks Darcy for posting. There's a lot to unpack here. Thanks for sharing with us. Yes I have the BB. Is the same color as the 20MA on the image I posted. It also has Christmas Cross on the image.

You are welcome. The hard part about trading perhaps more so because of how I trade is looking at several different things and using these to enter a trade. I do this because I do not hold on to any trade. Some of how I trade is a simple I can see the move...just see it. It reminds me of the movie Seabiscuit where if that horse was able to see what was coming up on him...you couldn't stop him. It was difficult for me to really read your chart. I don't know if it's because the background is black or if your moving averages are so thin. My background is light, light green and my indicators (all of them) are a 3 thickness. I set it up this way because of how I trade. What I do is a little bit of GW's, a little bit of Charles Payne and a lot of reading and studying and listening. I have learned a lot of interesting things on Investopedia and watching traders on youtube. If it didn't work for me I threw it out the door. It is hard enough to get it right and harder when you lose $'s. I needed to add that I researched and would stay up until 1 or 2 in the morning even though I had to get up by 5:30. I have reams of notebooks of all the different ways I tried trading marking those that didn't work for me. I read many of the books GW listed in 1-5 that pertained to trading. Some I could barely make past the first 2-3 pages. Those are the ones I ignored. One that helped me was "The market makers edge" and one I found on my own, "Technical Analysis for dummies." The later book was so informative...loved it.



Edited 1 time(s). Last edit at 08/15/2022 11:11AM by Darcy3.

Yeah I see my charts on a 27 inch monitor in a dark room, so I can see the lines without any problem. If I turn on the overhead lights though it does become a bit hard to see. lol.

Yeah Market Makers Edge was a good book. I haven't read the tech analysis for dummies yet though. I'm not sure if that one is even on GWs list. I've read all of the "required" books on GW's list and many more that are on the list.

Technical Analysis for Dummies is not on GW's list but I have found it to be so helpful in catching an understanding moving averages and what to look for. Some of his reading material makes things just a bit complicated and boring. I only read parts of some of those books which matched how I traded and explained what I was looking for. I like gaps and moving averages.l

Would you consider Technical Analysis for Dummies to be the best book covering moving averages?

How does it compare to a technical analysis book that GW did recommend? Martin Pring's Introduction to Technical Analysis.

Pring takes a multiple of words to explain something very simple which is moving averages. Technical Analysis for Dummies takes fewer words to explain the crossing of moving averages. IF you need detailed information as to why moving averages move then Pring isn't terrible, but he is boring. Trading the market should be anything but boring regardless of what GW said in 1-5. BUT if you want to know how a stock will move by using the crossing of moving averages without all the reasons why they do then Technical Analysis for Dummies is the book you need. I listened and read Pring until I almost thought he was not boring. That was scary! It was difficult to listen to him and NOT fall asleep. When I got Technical Analysis for Dummies, I GOT IT! I don't need to know why moving averages cross. I just need to see that they do and when they do. The system I found in Technical Analysis for Dummies works. S/O used the faster moving averages (5 and 10) which he called the E. It was too fast for me. I use the longer ones. I use them for support and resistance as well, even on small charts. I also have 2 large monitors and used them for quite some time. I do not anymore. Too cumbersome for me. Remember in 1-5 why GW said he used multiple monitors? It was so he could look into his office from a distance and see his charts. I had a friend who purchase 5 21" monitors, had 2 huge computers to run his set up and had to place a huge window air conditioner to keep the room cool. He doesn't trade anymore. Had 2 other friends who had 8 21" monitors in their basement, and they don't trade anymore. These took all of GW's classes until they simply gave up. To tell you the truth their entire system and monitors simply confused me. I use a laptop. It isn't the number of monitors that helps. It is what you learn in relation to how you like to trade. I like to get in and get out with a .50 profit (buying 3+ options) UNLESS I look at my charts and can see more. My charts read like this: row 1: 5,8,13,55 row 2: 21,34,3,1) row 3: 233 and daily row 4: monthly and yearly. I use moving averages (includes Bollinger Bands) for support and resistance and charts 3,8,13,21, and 55 for reasons to get into or out of a trade if I am watching otherwise, I use the moving averages on the 21 and 34 and where these moving averages are (price wise) to figure if the stock will rise $1.00 or more cut that rise in have and set my GTC accordingly. So if the choice is Pring or TAD I choose TAD hands down...JUST for moving averages. Pring when I need to fall asleep quickly.



Edited 3 time(s). Last edit at 09/02/2022 11:50AM by Darcy3.

Looking at a daily chart of the $INDU note that the candles closed below the 50 moving average starting 8/29 you will see this information is helpful. Look at META starting 8/22. It is used to start a trend. It is ONE TOOL to assist in understanding direction.

"The 50-day average is considered the first line of support in an uptrend or the first line of resistance in a downtrend.
If a stock's price moves significantly below the 50-day moving average, it's commonly interpreted as a trend change to the downside."

Read all this info for studying how the 50 is used. [www.investopedia.com].

Good luck with your https://eldfall-chronicles.com/product/2x-golems/. I'm sure you'll find what works for [telegrambetting.club].



Edited 1 time(s). Last edit at 05/09/2023 02:37AM by JamesBasej.