Wednesday, October 24, 2012 12:15:50 PM
Patience...Moving averages...CONFLUENCE...
The stock I'm going to use as an example of how to learn patience is in the Agriculture Chemicals ...I would like to own the whole group so something to work on...how to and when to BUY...
This is a CandleVolume chart I've been showing when talking about "volume speaks Volumes" doesn't always proceed price but it is nice when it does...IF...you are paying attention to above average daily volume (volume spikes) its a "signal"...volume speaks VOLUMES.
I only have a 10 day SMA here...don't really need any other indicators than "price" and volume...with volume working and price above/below the 10 moving average I should be able to make some trades...IF...I wait for the VOLUME to signal...so some patience is required...Until I have volume signal plus price above the 10 day average on my side ...WHY should I even own this stock...?
On this chart notice the volume spike and what price did relative to the 10 day average...
Next...
Moving averages...Moving average CONFLUENCE...
ALL of These averages are important...I'll show you why...
Moving averages are one of the most popular types of technical indicators...used in a variety of different ways to help find winning. Most have seen and understand the 20/50/200 day averages...I'm going to use the 10/50/100 day averages in this example but some may want to use the 20 and 200day instead of the 10 and 100day.
Moving Average Crossovers
By plotting two moving averages - a short-term moving average and a long-term moving average - you can get strong trading signals when the short-term one crosses the long-term one because this often signals a change in trend. Patience would wait for this crossover because it would be to your advantage to wait rather than tie up your funds "wondering" when or IF that crossover will ever happen. Often patience has its advantages by waiting for the signal...front running comes with added time and risk...
Moving Average Confluence
Another way you can use moving averages is by plotting three or four of these on your chart and then waiting for them all to come together. So if you use 5, 20, 50 and 200 period moving averages, for example, you want to wait for them all to be closely bunched up against each other because this often indicates a period of consolidation, and more importantly that a strong breakout is about to occur. So wait on this confluence...
Moving Averages As Price Targets
If you are a long-term trader you can also use long-term moving averages as natural price targets, particularly when trading price reversals. The 200 day moving average (simple or exponential) often acts as a magnet as well as a natural support or resistance level, so it makes sense to think about exiting *exiting) a position close to this moving average.
Now with these definitions we can look at the process on the chart and also note VOLUME speaks VOLUMES...
I want all those averages on my side...means I want the 10/50/100 day average all "POINTING" the same direction=trending...and then I want to read "Price relative to VOLUME" as price crosses those averages... and as the moving averages cross each other= some VERY powerful trades are happening here as price and AVERAGES act right=cross...this is where fast money is made in options=especially when "VOLUME" happens along with these kind of SIGNALS. So it is to you advantage to practice waiting for these signals to work for you...don't have to front run it either...just wait for the signal...then put you money to work...10% plus is almost a give if you act right and wait with patience...(go ahead try to prove that statement wrong=10% plus). Waiting is part of the plan...PATIENCE...follow the plan...
Chart now has 10...50...100 moving averages...
one year chart...can see when price moves above the averages...the 3 averages cross... all point same direction...and sometime with significant VOLUME...so there is a reason to wait for price and the signals and volume...its an advantage even with the longer term averages...patience is to your advantage... makes sense...
Same chart as above...6month view...
Having an understanding of the longer term moving averages can then be applied to the "grail averages" and their cross overs...but it is required of you to wait on those cross overs...true...?...so wait with patience while "KNOWING" the potential advantages and potential profits...Patience is IT.
Also there's a unique thing here about the grail averages and its relationship to them there longer term averages...but for another day...takes patience...
Same chart...now with 3...5...10 averages...
DID...VOLUME proceed PRICE on some of these cross overs...?
Enjoy...
Give back some to a good cause...
Enjoy...good trades...
You are only as good as your next trade...
Ki...Kiy...theMatrix
...simple patience is not a given human quality...its learned if practiced...theMatrix...humans complicate everything...
The stock I'm going to use as an example of how to learn patience is in the Agriculture Chemicals ...I would like to own the whole group so something to work on...how to and when to BUY...
This is a CandleVolume chart I've been showing when talking about "volume speaks Volumes" doesn't always proceed price but it is nice when it does...IF...you are paying attention to above average daily volume (volume spikes) its a "signal"...volume speaks VOLUMES.
I only have a 10 day SMA here...don't really need any other indicators than "price" and volume...with volume working and price above/below the 10 moving average I should be able to make some trades...IF...I wait for the VOLUME to signal...so some patience is required...Until I have volume signal plus price above the 10 day average on my side ...WHY should I even own this stock...?
On this chart notice the volume spike and what price did relative to the 10 day average...
Next...
Moving averages...Moving average CONFLUENCE...
ALL of These averages are important...I'll show you why...
Moving averages are one of the most popular types of technical indicators...used in a variety of different ways to help find winning. Most have seen and understand the 20/50/200 day averages...I'm going to use the 10/50/100 day averages in this example but some may want to use the 20 and 200day instead of the 10 and 100day.
Moving Average Crossovers
By plotting two moving averages - a short-term moving average and a long-term moving average - you can get strong trading signals when the short-term one crosses the long-term one because this often signals a change in trend. Patience would wait for this crossover because it would be to your advantage to wait rather than tie up your funds "wondering" when or IF that crossover will ever happen. Often patience has its advantages by waiting for the signal...front running comes with added time and risk...
Moving Average Confluence
Another way you can use moving averages is by plotting three or four of these on your chart and then waiting for them all to come together. So if you use 5, 20, 50 and 200 period moving averages, for example, you want to wait for them all to be closely bunched up against each other because this often indicates a period of consolidation, and more importantly that a strong breakout is about to occur. So wait on this confluence...
Moving Averages As Price Targets
If you are a long-term trader you can also use long-term moving averages as natural price targets, particularly when trading price reversals. The 200 day moving average (simple or exponential) often acts as a magnet as well as a natural support or resistance level, so it makes sense to think about exiting *exiting) a position close to this moving average.
Now with these definitions we can look at the process on the chart and also note VOLUME speaks VOLUMES...
I want all those averages on my side...means I want the 10/50/100 day average all "POINTING" the same direction=trending...and then I want to read "Price relative to VOLUME" as price crosses those averages... and as the moving averages cross each other= some VERY powerful trades are happening here as price and AVERAGES act right=cross...this is where fast money is made in options=especially when "VOLUME" happens along with these kind of SIGNALS. So it is to you advantage to practice waiting for these signals to work for you...don't have to front run it either...just wait for the signal...then put you money to work...10% plus is almost a give if you act right and wait with patience...(go ahead try to prove that statement wrong=10% plus). Waiting is part of the plan...PATIENCE...follow the plan...
Chart now has 10...50...100 moving averages...
one year chart...can see when price moves above the averages...the 3 averages cross... all point same direction...and sometime with significant VOLUME...so there is a reason to wait for price and the signals and volume...its an advantage even with the longer term averages...patience is to your advantage... makes sense...
Same chart as above...6month view...
Having an understanding of the longer term moving averages can then be applied to the "grail averages" and their cross overs...but it is required of you to wait on those cross overs...true...?...so wait with patience while "KNOWING" the potential advantages and potential profits...Patience is IT.
Also there's a unique thing here about the grail averages and its relationship to them there longer term averages...but for another day...takes patience...
Same chart...now with 3...5...10 averages...
DID...VOLUME proceed PRICE on some of these cross overs...?
Enjoy...
Give back some to a good cause...
Enjoy...good trades...
You are only as good as your next trade...
Ki...Kiy...theMatrix
...simple patience is not a given human quality...its learned if practiced...theMatrix...humans complicate everything...
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