Good Day folks, we are back with another edition of the rookie blog. Last week in the blog we talked about using INDICATORS and I gave all the rationale for their use and abuse. I believe that as traders we need to utilize all the tools available to us but I am also well aware of how access to so many tools can cause the phenomenon of analysis paralysis and therefore we have to be on guard against getting too overloaded. That is why last week I spoke about my favorite INDICATOR and how I use it. This week I am going to put together a short video showing all the things I spoke about last week.

I will talk about how I look at price action first and foremost and how I only use INDICATORS to confirm what I already see and believe. I will then show what information I can glean from using the moving averages and hopefully this will help you in your trading without causing too much overload of information. I want to share my knowledge with the readers of this blog but I also know that there are so many different types of traders that not everything is going to work for everyone. So the caution is this, give it a try by incorporating into your trading system and if it works or is helpful in some manner then great, if it doesn’t then consider it some great knowledge for a future day.

So, let me quickly recap the way I use the moving averages and then check out the video below to see them in action. First, I use the moving averages to confirm my bias on the market or the equity I am looking at. If the price is above all the moving averages then I am bullish in my bias at that moment. This is a very common way to use the moving averages. I then look at how the moving averages are lined up to tell me the strength of the trend. If the shorter term averages are all above one another and pointing in the direction that the price is moving then again this tells me that me bias is most likely correct and that the momentum of the current trend is reasonably strong. Thirdly, I use the width between the moving averages to tell me how much energy a trend has or whether the trend might be a little overstretched and maybe some caution is to be deployed at that moment.

I hope I have described this well but if it is a bit confusing check out the video below and I believe it will become crystal clear. Again these techniques might not be your cup of tea but I am hopeful that you can at least add some of this to your arsenal and that it helps in some small way.

I hope the video above gives some insight into the moving averages and how they can be used to enhance one’s trading prowess.

Be well and Trade safe,

Also, be kind to each other, everyone needs kindness.

Coach Holmes