Is it good to buy after a break below the 200 day SMA?

Is it good to buy after a break below the 200 day SMA?

Quickest answer.

Go to the chart of the financial instrument. See how the price reacted when bought below 200 SMA in the past times. It should give you a good idea about its behavior around that region.

Good answer safvan how far back in time would you go yesterday or last week/month?

On what timeframe?

edit: day ! I'm a tit

Chartsy said:

On what timeframe?

edit: day ! I'm a tit

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A tit is a useful thing

Pipsaholic said:

Good answer safvan how far back in time would you go yesterday or last week/month?

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I am judging that you are new to trading world. To give you a blunt and real answer which would actually help you in trading. Avoid looking at Moving Averages to gauge the trend. Indicators basically tell you what has already happened but they do not tell whats going to happen in the future. Its based on price action of the instrument in the past.

Almost all prices going up would be above their moving averages and all prices going down would be below their moving averages. Its not a rocket science. There is an equal chance for the price to reverse back when you are expecting it to go down when it is below 200 day moving average or it can continue to go down. Its not the moving average that confirms this behavior but just the price itself.

The only way to guess the market direction is to look at what the market is doing or current price is doing.

Study price breakout trading with support and resistance. Mix it up and then add money management and you would well on the way.

Here is a fine piece of video by a fund manager Joe Fahmy who runs Zenith Asset Management and is a former student of Mark Minervini. Get clues from here..


And best of all dont rush into money making. Really it takes time..Give yourself atleast 2 to 4 years.

BillSimmons said:

Is it good to buy after a break below the 200 day SMA?

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What TF are you thinking, the daily?

I think there is no right and wrong answer. This depends on your trading plan.