Mooers' Strategies: The Power of MA Indicators

Hi, mooers!
You have completed the first journey of the Technical Analysis Challenge. Thanks for your participation! We are glad to see that many of you have learned to use the indicators on moomoo and posted informative analyses to record your progress.

The following are the key questions regarding MA indicators and investing:
● How does MA work in the bear market?
● What technical signals does MACD trigger?
● How to use EMA for day trading and swing trading?
● Could DMI combine with moving averages in trading?

Do you know the answers to these questions? It doesn't matter if you can't answer them for now. Please follow us to take a look at the real-world case studies to solve the puzzles.

Part Ⅰ: Key Points of the Four MA Indicators
Technical Analysis Challenge Day 1 – MA:
Moving averages are usually calculated to identify the trend direction of a stock. The time frame is vital to apply the indicator.

Technical Analysis Challenge Day 2 - MACD:
MACD helps investors see whether the bullish or bearish movement in the price trend is strengthening or weakening.

Technical Analysis Challenge Day 3 - EMA:
EMA is used to produce buy and sell signals based on crossovers and divergences from the historical average.

(photo source: @JM investor )

Technical Analysis Challenge Day 4 - DMI:
DMI comprises four lines. ADX gives an overview of the trend's strength, while PDI and MDI assess the price action's direction.

Part Ⅱ: High-Quality Case Studies Collection

1. How does MA assist my trading in the bear market?
@JM investor
"In a bull market, moving averages are sloping upward. Each dip is an opportunity to add more shares. However, in a bear market, everything is the opposite."

"In a bear market, I would focus more on the index. Below is the $Nasdaq Composite Index (.IXIC.US)$ DAILY chart, which is in a downtrend."

"However, let's change the chart to WEEKLY chart. It is still an-uptrend if we look at the chart from a long-term perspective! We can add the shares in the weekly support as long as it is still up-trend!"

2. How to identify trends with MACD?
@bullrider21
"In $IFAST (AIY.SG)$ 's chart, the rally ran from Dec 2020 to Oct 2021. The bullish crossover in Dec 2020 triggered a buy signal. The strong uptrend continued until Feb 2021, with the upside momentum increasing. However, the upside momentum waned when it started to show a bearish divergence when the stock recorded higher highs, but the MACD line formed lower highs. In Oct 2021, a bearish double top pattern was formed, and there was also a bearish crossover. This generated a sell signal. There was a trend reversal which resulted in a major correction."

"From the chart below, you can see that the downtrend continues to this day."

3. How do I learn to love the drop with EMA?
@JustSurface
"When you're swing trading and looking for an entry, a bounce off that longer average timeline makes for more nuggies in the man cave." $Hycroft Mining (HYMC.US)$

"Now for those that flub an entry like myself here and buy the top, this is WHY you get in light at first. When the price drops, and it always does, look for that bounce to build a position and start prepping for roket!"

4. How to use EMA for day trading and swing trading?
@Investing 101
"For Day trading, I use the 233EMA to see the trend and the 55EMA as a guide for a pullback to open positions. It is below 233EMA, which means the trend is down. Every time it retests the 55EMA, you can short it, and it will be a high probability winning trade. Stop losses can be placed slightly above the 55EMA, and take profit can be 3x or 4x of your risk." $E-mini NASDAQ 100 Futures(DEC4) (NQmain.US)$

"For Swing trading: When the price is below the 233EMA, and it goes up to retest the 55EMA and fails to break above with a strong bullish candle, it could mean the price will stay bearish for the next few days. That can help set your bias so you can plan out for swing trades to capture the larger move. And if the price breaks above the 55EMA, I would close out my shorts and wait for it to cross the 233EMA to signify a trend change for the next few days."

5. How to combine DMI with moving averages?
@JM investor
"My first step is to draw a red line on the DMI chart at 25, so I know that if ADX is above the red line, it signifies the trend is in strength." $Microsoft (MSFT.US)$

"We had a nice up-trend from Mar 2021 to Dec 2021 whenever the stock price retraces. If ADX is above 25 and PDI > MDI, I put a green arrow there."

"Next, let me add the moving average to check if it will be better: It seems that MA50 is good support to combine with DMI to give us a potential signal for entry!"

*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.

Part Ⅲ: Winner Announcement

It's time to reward our hard-working mooers! We've prepared free stocks for the 6 featured-post winners who complete all 4 tasks. Thank you for sharing the high-quality and original posts with lines and charts. Your posts are quite popular among your fellow mooers!
Free AMC Stock:
@JM investor @bullrider21 @steady Pom pipi @Milk The Cow @JustSurface @Txfen80
88 Points:
Mooers who participate in more than 1 task and post with a minimum of 50 words & analytical charts will get 88 points each.
*The rewards will be distributed to winners within 15 working days.

During this activity, we witness the power of output and mutual learning. You can deepen your understanding of a new subject and remember it better by teaching others. So, let's keep teaching each other!

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