How do you use moving averages ..

Quote from Brandonf:

I just find them useful to have on the chart as a visual to see how far a stock has moved up or down. What I mean is that I don't think that buying a pullback to this moving average or that one, or a moving average crossover is likely to be profitable for anyone. You can look at the distance a stock is from its key moving averages though and get a fairly decent idea of how stretched out it is. If its gone "a little too far" in one direction or another. This just takes some time looking at charts. Some people like Larry Connors have published decent research on exact percent extended from this MA or that one means there is this % chance of a pullback in X number of days, thats all good stuff too, but I am more of a visual person..so I just use them to have an idea of where a stock is at. Hope that makes sense.

Brandon
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Hey Brandon,

It does make sense and I thank you for the input.
 
Quote from traderdragon2:

Save yourself hundreds of hours of time and forget they exist. MAs = dumb tool for selling books
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Hey traderdragon2,

At this point, I think you are right.

As a still green backtester, the first things I did, like many I suppose, was test every thing I could think of with ma's. Crossing, price under then over, distance from ma's, slopes, etc. I use all the stocks in various indexes and go from 100 to 4000 days. Got thousands of trades and just couldn't find anything that worked with ma's.

I was wondering if/how traders might use a ma or a combination of ma's for detecting trend.
 
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