Continue reading...If moving averages are hurting your trading or investing performance and getting you below average results, it’s because that’s exactly what they are designed to do. They are a very popular tool for novice retail traders and investors yet hardly used or thought about by the professional trader/investor. Helping you understand this is the focus of this piece.
Instead of going through many charts to find the perfect picture to use as an example to illustrate my logic, I like to use real trades as examples from our live trading rooms.
Below is a trade I took in the NASDAQ futures. We identified 2 strong supply zones where banks were selling that morning as seen on the chart below. When price rallied and reached the supply zones, I shorted the NASDAQ and profited ($1,000) as price fell. These were 2 strong supply zones on top of each other and there was a clear profit zone below. Notice the only information I used to make decisions was PRICE, nothing else. No tools, news, opinions...
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