10 Reasons moving averages work as trading tools.
- Moving averages filter trends in different timeframes.
- Moving averages can create entry signals at the beginning of a trend.
- They can be used as exit signals when price dips below them.
- Moving averages can be used as trailing stops so you can exit with profits when a trend starts to bend.
- Moving averages can be used in crossover combinations for slower signals.
- Moving averages can help filter volatility.
- You can do historical back tests of price action to develop price action trading systems using moving averages.
- Moving averages are reactive technical trading tools not predictive.
- When price falls below and then breaks back over a moving average it is a great signal for a potential reversal.
- 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:
- Moving averages are a way to smooth price action and quantify a trend.
- Moving averages are tools that can work on any time frame.
- They can remove your predictions and opinions from your trading and replace them with moving average signals.
- Unlike trend lines, moving averages are quantifiable facts not left to interpretation.
- Moving averages are simple to use in back testing systems.
- You can combine moving averages for crossover systems that are good at filtering out noise and volatility.
- Many legends mentioned moving averages in their trading like Ed Seykota, Jerry Parker, and Paul Tudor Jones.
- Moving averages are better gurus to follow than the talking heads on financial television.
- You can’t argue with their facts. Either price is above or below them.
- 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