Moving Averages - Technical Analyses - Trading


  • Fundamental anaysis : balance sheets
  • Technical Analysis : Price action - price factor in profit and loss. Trend is your friend.
  • S&P 500 - long term trend
  • need to be tactful to understand the chart where it is downtrend or uptrend
Other signals
  • moving averages
  • Volume weighted
  • Anchor

decision:
  • long
  • short
  • no position at all
  • “going side”

Simple moving average (SMA):
  • default 20 day MA
  • can modify to change MA for 50 days
  • what is the best MA?
  • day trader - 200 may be good , not 50
  • long term trader -
  • can see multiple MA together : 5, 20, 50, 200 - all together.
  • can even be 150 or 250
  • Shorter ones like 5 are usually above the 200 on a bullish one
  • everyday there is a candlestick
  • “capture a fatter tail”
  • remove the noise
  • SPY
  • Shorter trend like 5 day can sometimes deceive ,
  • is better to see the long term as well
all above is in frequency : DAILY

  • buy low sell high
  • buy high sell higher is not bad either

lagging nature of simple moving average

Exponential Moving average
exponential moving average more sensitive to recent price
- logarithmic component

You can change to frequency : Weekly or even minutes

Volume weighted average price
  • not only average price but also volume
  • was introduced back in the day when you can only layer in new orders through the day
  • so it can be sold based on volumes

Anchored VWAP
  • does not ignore all the other prices going through the day
  • other indicators only looks at closing price
  • anchor it to a place in chart
  • supply and demand
  • support and resistance

Surfers
  • ride the wave
  • sit out and float

MSFT
  • finding buyers
  • finding sellers

Volume profile
  • converging line
  • Correction
  • 50$ profit for $10 of risk - allocating risk

one is not better than the other
  • depends on context
  • triangular gives weight to middle data
  • double exponential / triple exponential - smooths the data even more
  • the ? symbol shows how the calculation is done

moving average envelope

bollinger bands
  • 20 period / 2 SD
  • just like envelope , but sensitive to volatility
  • candlestick outside of bollinger band - a new trend is setting

Events
  • earnings date and patterns

we are looking for a cluster of evidence

others are using moving average
so we can use it to see what others are going to do

You can get back in the trade after getting out

RSI

EDX > 25 - strong trend

Oscillator







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