Stock moving averages

By: Tim Grimsley | Posted: 25th July 2006

I have used moving averages for years as part of my trading plan. Moving averages are a good indicator for overall stock market direction. I very rarely trade opposite of the moving average direction indicator. The trading strategy that I use is fairly simple. Generally I overlay a 10 period and a 5 period moving average on my main chart for any particular market. You should also know that I only use candlestick charts for my trading. When I see the the candle cross over the 10 period moving average I will start to carefully monitor that market. I use the 5 period moving average as confirmation to execute my order. I will stay will this trade until the price momentum falls to the point that the price breaks through the 5 period moving average in the opposite direction of my position. Using this simple trading style I have made numerous profitable trades. Over the years I have added more confirmation indicators to this trading philosophy. I have tried various combinations of indicators. Some examples are pivot points, fibonacci retracement lines, 123 tops and bottoms, support and resistance, I have also played with some gann principles. I have enjoyed success through trying these various indicators.


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Tags: confirmation, combinations, philosophy, profitable trades, candlestick charts, tops and bottoms, resistance, moving averages, trading strategy, pivot points, price momentum