Weinstein rules for traders and 10 wma

skplunger

Newbie
4 0
In his book on trading Weinstein states that traders should use the 10 week moving average but in the rest of the book where he talks about trading he uses the 30 week moving average.

My question is do the rules given for someone who is a trader contained throughout the book for buying and selling short all apply to traders using the 10 wma or, as found in the book, the 30 wma?

Using the 10 wma seems to lead to entering trades in violation of other Weinstein rules for traders such as not to buy until a stock has crossed the30 wma.
 

malaguti

Senior member
2,373 459
In his book on trading Weinstein states that traders should use the 10 week moving average but in the rest of the book where he talks about trading he uses the 30 week moving average.

My question is do the rules given for someone who is a trader contained throughout the book for buying and selling short all apply to traders using the 10 wma or, as found in the book, the 30 wma?

Using the 10 wma seems to lead to entering trades in violation of other Weinstein rules for traders such as not to buy until a stock has crossed the30 wma.
there shouldn't be any violation, as the entry points are different
for the investor, its starting at the beginning of the trend into a stage 2 or down into 4. the trader doesn't enter at these points, he enters later as a continuation trade and he states that the 30 should still be firmly pointing up or down.

also with regard to exits, you shouldn't be waiting as late as a pullback to the 30 and using the higher low pivots to use as your marker

so I think if I read your question, no they shouldn't apply (10 as in 30) as the entries are different, as well as the exits and there is no violation as you should have entered later and exited earlier but always in the direction of the 30

I'm pretty sure I have that right. by all means ask more and if I can help I'll certainly try or I know a man who could answer thats for sure!
To be honest the 10 is hardly seen at all in the book

hope this helps
 

skplunger

Newbie
4 0
Thanks for the quick response.

I am re-reading Weinsteins (Ws) book to try to make sure I have the traders rules correctly understood.

Some further questions: When is the trader supposed to use the 10 wma? During continuation buys? Does the trader use the 10 wma to sell a stock when its price crosses the 10 wma or cover if short when price crosses a downward 10 wma?
The book keeps refering to the 30 wma in all examples and in the text when trading is discussed. Only page 13 states 10 wma should be used by traders.

I agree that traders are supposed to spend majority of time using continuation buys in a Stage 2 situation. Page 14 and 61 state the rules for such buys and references the 30 (not the 10 wma) which must be rising. Price must pullback close to the 30 MA , form a consolidation pattern, and then breakout above resistance. My question concerning this section: Why isnt the 10 wma used? Again, when is it used? I also wonder what consolidation patterns W is using. My gues would be traditional patterns like triangles, flags, etc.

Even though W says generally most traders will use continuation buys when long, he does say they can also buy pullbacks. (See Page 65 and 194) Page 194 is more detailed with W writing that "In fact if he can time the sale nicely when XYZ is well above the MA, the trader will often repurchase on dips back close to the MA."

My question: do you think the page 194 pullback is referring to the pullback to the MA that is part of the standard continuation set up or do you think W is simply saying as a trader you can just buy when price gets close to the 30 wma?
 

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