#Ma vs ema stock how to

How to use moving average indicator to ride massive trends Look at your past trades and notice how many of your losers are derived from trading far away from the MA. If you want to better time your entries, look to enter your trades at an area of value (like dynamic SR), and not when it’s far from the MA. Thus, if you’re looking to enter your trades, you’ll probably get stopped out as the market retraces against you. If the market “overextended”, then chances are it will pull back towards the MA. 'How does this help with my trading entries?' It will snap back if it's stretched too far away from the dynamic SR. You’ve learned that in a trending market, MA can act as dynamic Support & Resistance (SR), which is an area of value to trade from. What I’m about to share with you will greatly improve your trading entries. How to use the moving average indicator to better time your entries Your trade will be protected by the “barrier” which reduce the likelihood of your stops being triggered. Thus, if you were to set your stop loss just beyond the dynamic SR, wouldn't it make sense? You can think of it as a “barrier” that prevents the price from going through it. When the market is trending, price tends to bounce off at dynamic SR (which is an area of value). These are areas of value on your chart that's identified using MA (what you’ve learned earlier).Īnd this can be a powerful technique to set your stop loss. How to use the moving average to set your stop lossĪnother term you need to understand is dynamic Support & Resistance (SR). Personally, I use the “space” between 20 & 50 EMA to define the area of value. If you’re trying to trade mid-term trends (on your given timeframe), then the 50 EMA would suit you. If you’re trying to trade long-term trends (on your given timeframe), then the 200 EMA would suit you. Rather, you need to find something that's aligned with your trading approach. You’ve probably heard the saying “buy low and sell high”.īut the question is… how do you define what’s low and high? How to use the moving average to identify value on your chart If you want to learn more, go watch this training video below: And the flatter the MA, the weaker the trend. The steeper the MA, the stronger the trend. You can gauge the strength of a trend by looking at the steepness of the MA. if the price is above the 20 EMA and 20 EMA is pointing higher, then the market is in a short-term uptrend (of your given timeframe). If the price is above the 200 EMA and 200 EMA is pointing higher, then the market is in a long-term uptrend (of your given timeframe).Īnd. Here’s how to read moving average and use it to trade with the trend… Well, you could use the MA indicator to help you. 'How can I better define a trend objectively?' It could be a complex pullback, before the resumption of the trend. Just because you get lower high (and lower low) in an uptrend, doesn’t mean the trend is over. It takes time for it to run its logical course. Rome was not built in a day, and no real movement of importance ends in one day or in one week. I’m sure you’ll agree with me when I say that a downtrend consists of lower highs and lows, right?īut… sometimes you get a higher high in a downtrend, so does it mean the trend is over? How to use moving average to trade with the trend These are advanced moving average trading strategies that I’m using to trade the markets (and some of them you’ve probably not seen before). This isn’t a basic guide where you’ll learn the difference between simple, exponential, or weighted MA (you can google them yourself). A moving average trading strategy to capture big trends.

How to use MA to identify the best markets to trade.How to use MA to ride massive trends in any markets.How to use MA to better time your entries.How to use MA to identify value on your chart.The moving average is one of the most versatile trading indicators I’ve come across, and it can be used in different ways you never thought possible.

'Indicators are useless because it's lagging.'Ĩ years later. To be honest, I wasn’t a moving average trading strategy fan in my early years of trading. Without a doubt, I replied, “Moving Average” (MA). 'Rayner, what’s the one indicator you can’t do without?'