Moving Average
Introduction Following is the key learning from the book Moving Average Pro101 What is the use of moving average ? Moving averages are used to identify the trend Can be used with Support and Resistance, RSI, MACD, Bollinger Bands, etc Moving averages are an unbiased trend indicator Types of Moving Averages 5 Day EMA Sign of Strong Momentum Support in a strong uptrend Can be used in low volatility Can act as Trailing Stop Loss for day Bounce back from this line is a trend continuation 10 day EMA Decide the right side of the market, long or short If stock breaks below this then may be an indication of a downtrend 21 day EMA Intermediate-term Moving average The market always come back here - mean reversion in the market 50 Day SMA Support for stock in an uptrend In the bull market its the pullback support line It’s great for the “Buy the dip” level 100 Day SMA The deeper pullback in the bull market It provides a good Risk Reward Ratio 200 Days SMA Above 200 SMA its bull market go long only Below 200 SMA its bears market for short only Bull buy pullbacks to 200 SMA 200 SMA acts as a support and resistance line How to use Moving Average?...