In order for the brothers to better understand the "moving average" trading system, this guide map has been specially created.
The moving average strategy is one of the few trading strategies that is simple and has a positive return expectation.
From an operational perspective, trading is actually just two words: timing.
The moving average can almost perfectly address these two words.
Of course, most people do not use moving averages well; in fact, some do not understand moving averages at all.
The essence of trading is to kill the bulls; when your thinking aligns with that of most people, you need to be cautious.
In the eyes of the majority, what is the use of moving averages?
To determine direction, so there is the saying of not shorting above the moving average and not going long below it.
Support or resistance levels also lead to the saying of using moving averages for stop-loss and take-profit.
Entry and exit points, short-term and long-term moving averages crossing to go long...
Are these things correct? Are these things wrong?
It is obvious that sometimes these things are right, and sometimes they are not. In other words, these things are sometimes effective and sometimes ineffective.
Of course, at this point, some people might say, isn't this just nonsense?
Yes, it is nonsense. What I want to say is, have you noticed when these things, or theories, are more effective and when they are not?
The answer is actually very simple: they are effective in strong trending markets and effective in wide-range fluctuation markets. During these two periods in the market, you will find that blindly going long on moving averages can lead to profits, and using moving averages for stop-loss is just right. Pulling back to the moving average is the perfect entry timing.
Yes, this is the essence of moving averages, which is to stand at the wind outlet; even pigs can fly.
In simple terms, the success of the moving average strategy depends on whether you are using it in a trending market or a wide-range fluctuation market.
Trading is a game of waiting; patience is an important skill.
The key to success is not the strategy, but what kind of strategy you should use in the current market situation.
When the brothers do not know what strategy to use, staying out of the market is the best strategy.
