50 Day Moving Average
- Thread starter hwaxen
- Start date
nice. remember, the 50 day MA can be any 50 period MA tweaked for the time frame one wishes to trade.
enjoy !
enjoy !
In the 50's Time Ratio Modulation was a significant transmission encoding data mechanism in analogue computers and it had military applications for low frequency communications (under water). The xo on a "square wave" was the signal.
Information is information; the tradition of the 50ma alone makes it useful vis a vis competing. Trading ahead of MA type traders is very common for getting a nice "push" on momentum trading.
So what do you use to get ahead of the MA traders to get in early before this potential push?
Divergence strategies, Japanese Candlestick strategies and Pullback strategies are a good start to provide earlier signals before MA strategies.
NihabaAshi
If you are strickly an MA person, The combination of 40 MA and Volume BO (increasing works)
If you are more open to using signals from any source, The sequence you get from the combination of Price formations, volume BO's (increasing) and MACD BO off neutral and divergence really nails it.
when you pass the point of non failure to BO on volume, that is, the volume BO is sustained and increasing, you are at a place where there are no flaws on entry. All of this occurs prior to the 50MA signal.
The initial monitoring clue that is most helpful is a price formation coming to a close. All most all price formations only work when they are ending. The one you need to use for the impending start of making money most often is the leading formation sinal that comes before the end of the existing formation. (This is an overlap of formations).
You look for a trend inital point. It occurs before the end of the existing trend (a trend BO will end it soon). What is killing the existing trend is the volume not sustaining the existing trend.
If you are neutral biased you probably are already making money in the existing trend. When you see this initial point (1) of the coming trend, you prepare to enter as a reversal primarily to be continually making money all the time.
This type of strategy is what gives you the first "push" and a maximum profit on exit of prior trade simultaneously. You finish the first profit push and ride along the old trend BO occurs Point 3
I illustrated this and you can see the last bars are making a turn within the channel i set up s soon as I had point 3.
The 40 MA will be coming up soon (shown) and after that the 50MA croud will be thinking about making and entry. You are well into the trade having gone in at point 1.
This chart is being used for beiginners in another thread. I put the 40MA on it and am using it to show you signal sequences that run ahead of the MA world.
This is what is going on today ,now.
For making money, beginnings of trends are relatively important. There is always a trend as we all know.
As trends come to ends; there is a sequnce of events that unfold. By watching the above, you have a countdown that comes to an end. Then a count up happens for the new trend. They overlap each other as the chart shows. Here are the details for the three indicators.
Volume. buyers and sellers dissagree on everything but price. Price is the place where they agreed and transact as pairs. Volume measures the quantitiy of agreements. Trends flow as the smallest group (buyer or seller is used up) This succession also comes to an end at some point because one side is nearly empty of participants. This is called Dry Up in some scenarios. It does not last. People continue to proceed with their strategies. I for one, look for this and I place orders for the market to come to. Once the participants change their views, volume increases rapidly and price hardly changes. As this volume action is seen by the smart money, there is an effect. For some entry takes priority over price. Once you know these things, you enter to get in the trend that is going to happen as the herd begins to catch onto the move. So first comes a DU and it is followed by a BO in volume. The A/D indicator tells you which is the short line of traders A is for buyers D is for sellers. The short line is the one incharge. Accumulation/ Distribution is a key market variable and ranks third compared to P then V.
MACD. The MACD is designed to emphasize change. IT has two lines (fast and slow). Together they generate signals. There is a sequence: Max away from neutral of the fast line, convergence, xo when the slow line reaches max away from neutral, divergence. fast line xo at neutral , and slow line xo at neutral. Peopl use these signals to trade at varying degrees of confidence and risk.
For trend change, you can start with the point where the neutral line is where to start as the most conservative viewpoint. We are only wanting to be "pushed" by the MA50 herd so we can be very cnservative and just start there. The Volume declining and going into DU usually means most market action is slow and congested and noise buries all signals. Usually the MACD xo's on neutral repeat over and over. It is though the lines look "entwined" with each other. as you get within a certain limit of neutral and stay there, then you a in a sequence of congestion going to convergence (lower volatility ), and then centering of price. These three formations are common as a set for making money on faster fractals.
When the MACD breaks out above these certain limits (they are set for this purpose) and then diverges, you have a new trend beginning. The 50MA will within 25 bars go to a horizontal orientaion. You have a 25 bar lead over 50MA followers as BO begins. It takes many bars to really be esablished for conservative users of indicator signals.
Which MA do you guys prefer.. the simple or exp.?
WMA