Moving averages, most common

[expensif]

What are the most common moving averages used?


Stan Weinstein is using 30 day MA in his book "profiting in bull and bear markets", saying the MA acts like support/resistance.

Is it acting like support/resistance, because traders see it like support/resistance? This would make it seem like a "self fulfilling prophecy", doesn't it. And therefore the most common MA would be the most effective ones to use. Or am i misunderstanding something here?

Cheers!

 

[TWI]

Quite often you can find the most effective MA visually by seeing where a chart has found support or run into resistence in the trend. Some would call this curve fitting but it does tend to work particularly on short term charts and when isolated to a given trned move.
There is no standard length although 9,14,21,50,100,200 appear to be the standard in most analysis reports. Stan Weinstein is genralising and I would not use a buy above, sell blow strat on 1 moving average, it will lead to ruin.

 

[Dacamic]

... Stan Weinstein is genralising and I would not use a buy above, sell blow strat on 1 moving average, it will lead to ruin.

I agree. Moving averages should be used as part of a system, rather than as a whole system.

 

[expensif]

Thank you!

 

[houdani]

try telling vince stanzione and his legion of the damned(and broke) that! his whole trading plan revolves around breaks of the 20dma.

 

[oatman]

Fib numbers are popular.

 

[Euro_d]

try telling vince stanzione and his legion of the damned(and broke) that! his whole trading plan revolves around breaks of the 20dma.

Totally agree Sir, except that "Sir Vince" also tells (yep, I have to admit I did buy his stuff many years ago, now disgarded) that a good entry is 20/40 ma cross. Not a bad starting point but, yes, you will certainly go broke following that strategy alone.

Stanzione and his peers (and copy cats) actually do a good job of introducing people to our world but newbies must not be illusioned to thinking that making money is as easy as they claim. I am sure all on here will testify to the fact that making money is far from easy. I have seen posts that it takes years! If you get it right 50% of the time and practice strict money management you will make money.

Good look
Dave