Moving averages

No argument here. Simple backtesting will tell you whether historically there's any edge with whatever MA system is under consideration.

 

That's not true Tommy.

 

I also use the 20 EMA as the first profit target for counter-trend trades. Sometimes it breaks right thru, meaning the trend has likely reversed.

For getting in on a trend, I use the 20 EMA as the area to enter the trend. Short when price rallies to the falling MA and long when price falls to a rising MA.

As an example, today I shorted AMZN just before 1:15 p.m. when price hit the falling 20 EMA on my 3-min chart and resumed falling.

If you look at a 3-min AMZN chart for today, once the lower high was established at 11:54 a.m. price continued making new lows off every rally to the falling 20.

 

Thats pretty much the way I play it as well. If price breaks through with some conviction I'll keep some breathing room in my stop and let it ride, but if it just bounces and bumbles around anywhere in that area im out and looking for my next entry signal. Like I mentioned in my first post, for me the moving average is an AREA of interest, not hard line in the sand. I think of trendlines and S/R levels the exact same way. I just like to see what price does in those certain regions of interest, not what price does at some specific tick.

 

We just follow it.

 

I know that some people use it, but the long investment cycle.

 

They're widely used though.

 

That's what stops are for.

 

I will respectfully disagree.

 

Any (ex-)floor traders care to weigh in on the MA argument? I notice whenever you see on the floor at one of the exchanges a monitor showing a chart, there's always at least one MA plotted, unless that's VWAP or something else.