(D): This hotel trust is clearly ______ .

The Powerful Simplicity and Behavior of Moving Averages.

Description:
Beyond the normal definition and calculation of Moving Averages, they filter out the noise, show direction, strength, and volatility. My faster ema9 and ema19, the two green lines and light green fill, are faster and more responsive to the noise of the time frame. While my slower ema50, bold red line, and ema200, maroon line, are historical flag bearers; they are what the m=Market uses, legacy algorithms and now, to some degree, a self full-filling prophecy. They are perfect for showing orientation, long/short/neutral, and duration of the time frame.

PEB Analysis Example:
MAs alone. It is bearish, since ema50 is negative sloping, though nearly flat, and approaching its ema200. Furthermore it does have some reach or volatility at times due to the distance ema9 moves away from ema50. It is short or neutral until for now. They might have a positive (increasing) slope soon. Generally ignore flat slopes since those show an indecision or a potential point of concavity.

Application:
If you are a long term investor, the Market Lines, MAs 50 and 200, provide simple proven trading systems and signals with minimum analysis. Then you can use your faster MAs to understand the speed and volatility as well as a potential exit signal when they intersect. For the rest of us, the same concept applies in the lower and faster time frames.

Do you have to use Exponential Moving Averages?
No. These are the ones I learned on and most comfortable trading with. There are a handful of different MAs, some more responsive than others. Use what you are more comfortable with.

Why do you use 9 and 19 speeds (lengths)?
I wanted a set of lines that represent my trading goals and activity. Since ema50 and ema200 are my market lines, I wanted emas that were more responsive. By the traditional calculation of alpha, a = 2 / (n + 1), where n is the MA length. When n is odd, it just simplifies the calculation of alpha. Nothing special really. Use whichever lengths you are comfortable with.

What about the other indicators?
More detail another time. But generally bearish.

Should you trade with MAs alone?
Uh. No. Volume is also an important factor in the technical and psychological analysis of the asset's valuation.
Also more detail on OBV another time.


By Kevin Johnson
Stock Twits and Trading View: tradearcher
tradearcher
Moving AveragesPEBtradearcher

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