Moving Average Crossovers: A Customizable System for Determining Buy and Sell Points
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Moving Averages are useful for filtering out noise and visualizing a stock’s true trend. The 10-, 30-, 50-, and 200-day moving averages also tend to act like support and resistance, too, so it’s always smart to have at least one of them as an overlay on all of your charts.
But how about more than one of them?
When you use two or more moving averages, you have the opportunity to spot moving average crossovers, which is the subject of this week’s TradingTips.com video newsletter. Read on!
In this episode, you’ll learn:
- All about moving averages — a quick review for those who are rusty (0:41)
- How moving averages are calculated (1:21)
- The difference between Simple and Exponential moving averages (2:11)
- How moving average crossovers can signal buy and sell points on a stock chart (2:40)
The video also contains examples of real stock charts with moving average overlays, including a chart showing how using the 10-day and 30-moving averages could have pinpointed perfect buy and sell points.
Another thing that is great about moving average crossovers is that they can be used for short-term, long-term, or intermediate term trading — the longer the moving averages, the longer term the signal. In this way they can be customized to fit your trading style, no matter what it is: long-term, short-term, buy, or short-sell — it doesn’t matter, moving average crossovers can work for you.
Happy Trading!
Manny Backus
CEO, Wealthpire Inc.
P.S. Next week we’ll look at the Absolute Breadth Index — be sure to tune in!
Episode 57 – Moving Average Crossovers: A Customizable System for Determining Buy and Sell Points
