So firstly, I use moving average just to get a general sense of the trend. Of course, I use trend lines to analyze whether the trend has changed or not. Sometimes, I use moving average just to help me to see whether, from a moving average angle perspective, has the down trend line or has the down trend been overcome? Has it turned into an up trend already?
So, let’s say the price is already moving above a certain moving average of a certain perimeter for this particular stock. Then I would also look at a trend line. Then I will say, “Okay, both these tell me that the down trend has been unconquered. Now it’s likely to be on the up trend from here already.”
So, there is one way that I might use moving average from a price action trading perspective, just to get me a general view.
Interested to receive mentorship opportunities like this with Philip?
Find out more at traderwave.com/innercircle