THE SIMPLICITY OF MOVING AVERAGES

BY: STACIE SHAPIRO

• What is a moving average?– A mathematical calculation that smoothes price action into more of

a trend indicator– Simple versus Exponential

• Calculation differences• Choice depends on time frame – day trade, swing, investment

– Picking your time frames• Again, type of position will dictate your time frames

– Common simple time frames: 20, 50, 100,150,200– Common exponential: 5,8,13,21,34,

• How do we use moving averages?– To give direction– To give signals – some use a cross over method– In combination with other methods – **CONFLUENCE**

What to look for with the moving average

• General direction• Where is price in relation to the moving

average– Price riding moving averages up– Price extended from moving averages– Moving averages extended from each other

• Which moving average seem to matter?

C Daily Chart

C 15 Min Short Set Up

Confluence of chart pattern and moving averages

TITN DAILYEarnings Gap Play

TITN 15 Minute

AAPL Short Set Up

Confluence of chart pattern and moving averages

CRUS Earnings Gap Play15 MIN CHART

5 MIN CHART

SPY SHORTMay 1, 2012

SPY 15 Min

SODAPre- market earnings gap

MNST Earnings Gap