3 Ways to Tell If a Stock Is Trending or Not -- with David Moadel
this was maybe 73 you know i have been adored
by good and kind men hello and welcome to looking at
the markets with david modell three ways to tell if the stock is trending or not
this is important because a lot of people will say
only trade a stock that is trending not one that is
just kind of chopping sideways or is directionless
you know you could believe that or not it depends on your system
but before i get started please be aware that everything i'm going to say today
does not work perfectly does not work 100 of the time
don't do something just because you saw somebody talk about it in a video all
right make your own decisions do your own due
diligence do your own research all right also if you need
some more help i do offer coaching for traders and investors
you can email me for the coaching at david modell gmail.com
now the idea i got today uh is from a rob colville video it's called how to
profitably trade using moving averages and it's a pretty good video so
uh i want to recommend that people watch it i will put a link in the description
below this video over to that video against by rob
colville and it is from fx street and so feel
free to subscribe to them and i'm actually going to give it a
thumbs up right now all right so it's a good video okay and uh thank
you fx street and rob colville for the idea
here he recommends uh three things okay first you want to
look at the angle uh the second thing you can look
at is the order and the third you could look at the
separation aos angle order and separation what does all that
mean well let's say if you put up uh on the
daily candlestick chart of a stock and this doesn't have to be stocks you
could just as easily do this with cryptocurrencies or commodities
forex currency pairs whatever and also it does not have to be
daily candlesticks these are one day candlesticks for home depot
hd home depot stock on tradingview.com here but you could also try this with
one minute candles two minute five minute
four hour candles whatever you like uh just please make sure that you demo
trade it or virtual trade it uh just to test it out without any real
capital at risk just to make sure it works okay
so let's start with the a angle right so if you want to know whether a stock
or whatever it is is trending or just going sideways
you want to see the angle on the moving averages and i put up three of them here
i put up the 20 period ema exponential moving average
i put up the 50 and the 200 okay the 2050 and 200 emas
and it is color coded here all right so the
uh the 20 is in black it's a black line here okay you notice
how the 20 period kind of hugs the candles a little bit
closer right uh and then you've got the 50 which is
in purple and then you've got the 200 period
moving average in blue here okay so again the 20 period moving
average the 50 and then the 200 all right all of
them emas exponential moving averages right so
first we're going to look at the angle all right and as we can see we have
just sideways chop here and look at the angles of the moving averages
are they at a steep angle upwards like a 45 degree angle upwards or
downwards or just kind of either totally
horizontal or just barely tilted in one direction or the
other well i'm looking at all three of these lines and yeah i mean the 50 is
a little bit the purple one's a little bit wavy and then the 20 the black one
is even more wavy but really they're not trending in one
direction or the other i know that because of the angles on the
lines they're kind of horizontal or close to it so that's the
first thing is the angle whereas over here where it's trending
you could see the angle is not quite 45 degrees although on the black line the
20 it's it's pretty close to 45 less so
with the 50 and even less so with the 200
but it takes a lot for the 200 uh period you know the 200-day moving average
to really go sharply you know 45 degrees it would take a serious
trending price movement for that to happen
doesn't happen very often okay so all three of them are definitely they
definitely have an angle to them a sharp angle relatively speaking
definitely sharper than over here all right so that's one example
uh okay so that's uh that is the angle then you want to look at number two the
order it's aos angle order separation so what
is order well are the uh three lines in their
proper order in they should be in numerical
order it should be 20 50 200 or if you go backwards 250
20 but it shouldn't be all mixed up okay so for example
uh over here where it's definitely trending
upwards uh you know you can start over here you can go
you got the 20 and then you got the 50 and then the 200 if you go in order you
can also go backwards 200 50 20 whatever all right but they're in
proper numerical order what about like over here well you got
the 50 hopefully you can see it it's kind of
small i know but you got the 50 and then the 20 and then the 200 that's
not the proper numerical order right okay it's all kind of jumbled up
here so that's another way to tell all right
it should be in the proper numerical order for it to be trending
now i know over here it's in the proper numerical order
right uh 20 then 50 then 200 all right but that's just one thing you're looking
at hopefully you're looking at all three
things all right so yeah you've got the you've got the order here correct but
it is the angle really steep is it sharp in one direction the other no
okay so it doesn't pass really the angle test so much
even if it passes the order test definitely doesn't pass the order test
here okay so uh or over here either right
it's got the 50 then the 20 than the 200 not the right order
okay so that's angle order and then the s part is
separation all right uh notice how cl it doesn't really pass that test over
here look how close they are together they're not separated very well
especially the 20 and the 50. a little bit of separation with the 200
from the other two but not so much definitely not a lot of separation here
they're practically on top of each other here
okay and actually the over here look they are on top of each other two of
them the 20 and the 50 are on top of each other here
and here and here and here all right so it's not
that often you're going to get all three of them on top of each other exactly but
they're really close they're not well separated
in this area here so that is not trending that's or that's a sign
one of three signs you can look for look how separated they are here
all three of them right you can see lots of space between all three of them
and that's a sign that they're trending so over here
and over here you've got angle right it's a steep angle in one direction or
the other not just horizontal or close to it
you've got the right order 20 50 and 200 or you can go backwards
right 200 50 20 either way and
separation you got you got nice separation here not so much
over here all right so hopefully this was helpful to you again uh
thank you to rob colville and fx street for their video that inspired me
uh to make this so please visit them link in the description
uh below this video and feel free to subscribe to fx street pretty cool
and uh if you want some uh coaching once again if you want some more help because
i don't want you to use a strategy or an idea just because
somebody said it in a video i want you to have your own plan
okay and i do help people to put together their own
trading plan where they can think of things on their own and not just be
dependent on anybody alright and for the coaching you can
email me at david modell gmail.com i hope you enjoyed this video
thanks a lot for watching and listening i will talk to you again soon
you know i have been adored by good and kind men