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How and When to Use Moving Averages

Price action provides me with chart patterns [1] to trade from, and usually, that’s enough.  However, occasionally I’ll see a situation where adding a basic indicator can really help out.

Many traders rely heavily on indicators, and while it’s my style to keep my charts nearly bare, indicators can be helpful.  I think where traders tend to get into trouble is when they rely solely on the indicators, rather than seeing how they confirm or deny the overall price action.

stockbandit_click_300x100 [2]If you’re looking for a one-size-fits-all indicator to rely on in all market conditions, or which all stocks will respect, you’re going to be looking for a very long time!  However, if you’re willing to learn when, why, and how to apply indicators to your charts, they can be an aid to your trading process.

In this post, I want to show you how and when I use moving averages when eyeing potential trades.  It’s a very basic indicator, but when there’s a trend present, it can help you gauge momentum, as well as help you decide on entries and exits.

Let me suggest going full-screen with the ‘HD’ option for best quality in the video.

Trade Like a Bandit!

Jeff White
Producer of The Bandit Broadcast [3]

Are you following me on Twitter [4] yet?