For any interested in learning any Basic FA skills the following is a summary IMHO of using one of the most Simplest tools, Moving Averages (MA) for entry and exit points.
I use Exponential 10 (*), 35 (*) and 200 (*). in timeframes with (*) = 1hrly, 4hrly, (D)aily, (W)eekly and (M)thly periods or charts.
Basic rules:
10* cross above 35* (below 200*) = short term uptrend 10* then crosses 200* = medium term uptrend 35* then crosses 200* = Long term uptrend
Reverse crosses of above = Short, medium and long term down trend.
FOR ST TRADING DAILY ENTRY SIG:
Wait for 10* and 35* to cross in a minimum of 2 timeframes (1hrly and 4hrly). Pull the trigger and get set. At a price that is closest as possible to the value on the 10day average. The 10D cross of 35* which should then follow on the daily chart is a confirmation of the ST entry sig. (Monkey smiles) If the daily 10D cross 35D doesn’t follow through at this point in time you get an immediate caution signal, you have a warning to either expect sideways or lower prices. Monkey must now make another decision. That one will be up to you. (Look for the other triggers that made you interested in the stock)
What if the price is already above the 10 day and you want to enter?
Place your bid as close as possible to a value just above the 10D average and WAIT. Why? Because a close below 10D will be a ST exit sig this gives you the tightest possible stoploss and with a bounce in price off the 10 day you are set. A close below and you are immediately out. If you are chasing the price above the 10 day average in ST trading you won’t last 2 long in this game.(IMHO) If the price continues down look at the weekly chart for the price of the 10W this is potentially next support level and look for the next Entry signal (close above the 10D) around that area of price.
FOR ST TAKE PROFIT OR EXIT SIGNALS
Exact opposite crosses of above when you get a daily price close below the 10 day moving average.(I have noticed 7 day average has been mentioned on here before but the smaller you go in time frame the more likely you are to get a False sig and get flipped out of a winning trade (when in its early stages.) I would only use the 7 day exit if there had already been a substantial rise in price.
The bigger the time frames (*= weeks and mths) the more powerful the strength of the trend and signals. LT exit sig for me on something that has moved substantially is price is a close below the 10W.
WHERE IS THE “SAFEST” EASY MONEY?
Look at any weekly and mthly candle chart. The biggest candles of the trend are after the 10 Week/mth above 35 week mth cross and after these lines get back tested to confirm support. These are priceless entry posits for RvR when buying as close as possible to a 10 week or 10 month EMA to ride the next big wave up.
WHAT CHARTS OR STOCKS ARE THE BEST FOR ME TO TRADE?
Another tip if you use Chart software is to turn the candles OFF and just look at the 3 timeframe lines of the MA’s, look at what to expect of a position by looking back in history, look for charts that you can read easily. Look for the waves in the averages that build like a true ground swell then break up with big faces that you can ride rather than choppy shore break where you can get chewed up and spat out.
Patience and stock selection is the Key to long term success in making coin for a TA POV, wait for the right chart and right price to come to you. At whatever level in the chart that may be.
