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HomeTECHNICAL ANALYSIS10 Reasons Moving Averages Work

10 Reasons Moving Averages Work

10 Reasons moving averages work as trading tools.

  1. Moving averages filter trends in different timeframes.
  2. Moving averages can create entry signals at the beginning of a trend.
  3. They can be used as exit signals when price dips below them.
  4. Moving averages can be used as trailing stops so you can exit with profits when a trend starts to bend.
  5. Moving averages can be used in crossover combinations for slower signals.
  6. Moving averages can help filter volatility.
  7. You can do historical back tests of price action to develop price action trading systems using moving averages.
  8. Moving averages are reactive technical trading tools not predictive.
  9. When price falls below and then breaks back over a moving average it is a great signal for a potential reversal.
  10. Moving averages are better gurus than talking heads on financial television.

Moving averages have a place in any trader’s or investor’s strategy. They are my favorite filter for price action.

Moving Averages are Great Trading Tools

I like moving average signals for their power and simplicity in my trading and here is why:

  1. Moving averages are a way to smooth price action and quantify a trend.
  2. Moving averages are tools that can work on any time frame.
  3. They can remove your predictions and opinions from your trading and replace them with moving average signals.
  4. Unlike trend lines, moving averages are quantifiable facts not left to interpretation.
  5. Moving averages are simple to use in back testing systems.
  6. You can combine moving averages for crossover systems that are good at filtering out noise and volatility.
  7. Many legends mentioned moving averages in their trading like Ed Seykota, Jerry Parker, and Paul Tudor Jones.
  8. Moving averages are better gurus to follow than the talking heads on financial television.
  9. You can’t argue with their facts. Either price is above or below them.
  10. They have made me a lot of money during trends.

Here are my three moving average books:

Trading Tech Booms & Busts for $2.99 http://amzn.to/2tMRDQ0

5 Moving Average Signals That Beat Buy and Hold for $2.99 http://amzn.to/2tMEhmV

Moving Averages 101: Incredible Signals That Can Make you Money http://amzn.to/2tHHhNi

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