Tuesday, January 31, 2012

MOVING AVERAGES

Hi Folks,

I figured I would explain what I mean about the moving averages flattening while waiting for a trade set up. I recommend using 2 moving averages on your chart. People choose many different periods. Through trial and error and eventually the advice of a friend I use the 34 and the 81 period for my charts. Many use the basic 50 and 200. I like to see the 34 MA start to roll over and flatten out before looking for a short in a general uptrend. The exception to this is when the stock is well above the 34 but still trending higher. I use these same MA's on all time frames.

On the 30 and 60 minute charts, the MA's are flattened out now but the longer term( the 2 hour and 4 hour) are not flattend out yet. This is the first touch of the uptrending 34 on the 4 hour so I expect a bounce off of it. However the setup for a short is getting closer.

Thanks and Good Trading,

Tim

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