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TA Challenge: How do you identify trends with moving averages?
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Milk The Cow joined discussion ยท Mar 14, 2022 02:10

Tech Analysis To Identify Trend Using Moving Average - MA ๐Ÿ“ˆ Day 1 (AMC As Example)

Yoyoyo, let's do this guys!

What is Moving Average (MA)?
It's the average price of a futures contract or stock over a set period of time.
U can adjust the time period to ur preference.
By default/most common used is 14 days.

Since this event topic is mainly related to $AMC Entertainment (AMC.US)$ , let's us use the AMC stock graph ๐Ÿ“Š :

Dam, why I'm so stupid as to mention common used is 14 days for MA... created more work for myself...
Without further ado, let reset ur MA setting back to default as shown in the image steps 1-5๐Ÿšถโ€โ™‚๏ธbelow (Note: This is mobile๐Ÿ“ฑversion):

Step 1:
Tech Analysis To Identify Trend Using Moving Average - MA ๐Ÿ“ˆ Day 1 (AMC As Example)
Step 2:
(For mobile drag slide to get to "Indicators")
Tech Analysis To Identify Trend Using Moving Average - MA ๐Ÿ“ˆ Day 1 (AMC As Example)
Step 3:
Tech Analysis To Identify Trend Using Moving Average - MA ๐Ÿ“ˆ Day 1 (AMC As Example)
Step 4:
(Reset to "default" if u think there is a need to)
Tech Analysis To Identify Trend Using Moving Average - MA ๐Ÿ“ˆ Day 1 (AMC As Example)
Step 5:
(Input 14 to whichever MA sequence u desire.
In my case, I choose MA2 as my 14 days.
Notice the colour.
Note: You can reduce the numbers of MA curve by un-checking them)
Tech Analysis To Identify Trend Using Moving Average - MA ๐Ÿ“ˆ Day 1 (AMC As Example)
Hurray! Finally all done!!!
OF COURSE... NOT!!!
This is just all the basic setup.

NOW!
Let's move on to how to use the MA of 14 days as shown in the picture ๐Ÿ“ธ below:
Tech Analysis To Identify Trend Using Moving Average - MA ๐Ÿ“ˆ Day 1 (AMC As Example)
Purple = Take notice of ur MA curve colour
(Note: For mine, is Light Blue colour for the 14 days MA curve)
Green = Up trend (above the Light Blue)
Yellow = Down trend (below the Light Blue)
Note: I realised my "circling" is out of shape/not that accurate. But i think u guys get the idea ๐Ÿ’ก. Cut me some slack on the "circling"... Monkey ๐Ÿ’ cannot draw perfect "circling". PS, my art ๐ŸŽจ just scored 50+/100 mark.

Now, question...
Where should u buy? The green or the yellow?





OK 5 sec up

For me, I will buy in the yellow because it's likely the cheapest point.
Some/most investors will say is the green as it is the period that it start to turn up trend.
My conculsion is u ownself decide for yourself.
Why?
Because MA is not the only indicator that factor in for my purchasing of the stock at that price.

Although it says common use is 14 days, but u can choose a longer period, for example 50 days/100days if u are a longer term investors to avoid market volatility .
Why 14 days is the most common used?
Neither do I know . Ask the one who invented the MA.
He claimed that 14 days give him the most accurate results.

I may not explains that well for MA. So I will refer some others' explanation about technical analysis which I find it not bad.

Guidances that may explain better than me:
Investment 101 | Discussion

Investing 101's Homepage (A Moo'er ๐Ÿฎ. His explanation about technical analysis seem good to me.)

Always DYODD first before investing

Edited:
Eg. why some/most investors say buy above the MA curve:
NANA123 :Avoid misunderstandings and seize the core of the transaction!
Look at her that $Apple (AAPL.US)$ graph.
The price just keeps increasing above the MA curve = up trend momentum.


New added guidances analysis/point of view:
bullrider21 :Moving Averages (MA)

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Milk The Cow
DYODD before investing ๐Ÿ‘Œ
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