Triple Moving Average Crossover Trading Strategy // explained method day swing stocks intraday indicator tutorial beginners day secrets video chart patterns youtube settings daily chart rsi stochastics macd technical scalping basics how to use david moadel
welcome to looking at the markets with David Modell today I wanted to explain a
triple moving average crossover strategy it will use three different moving
averages and the ones that I'll be showing today will be mostly for swing
trading because it's a daily candlestick chart but you can also apply this to the
five-minute candlestick chart 1 minute 2 minute you can date rate with it
whatever you want alright so just to adjust it accordingly
and I want to get to give credit this website we're looking at right now is
stockcharts.com and this is the daily candlestick chart for Kroger and what
I've put up here is the exponential moving average actually 3 of them the 15
period exponential moving average the 25 period and the 50 period you can also
use simple moving averages instead of exponential moving averages if you want
to it all depends on your preference but they both can work alright
so as you can see the the slower moving average is the 50-day exponential moving
average that's the green line okay it moves more slowly and then slightly
faster than that is the 25 day moving average and that's red so the 50 is in
green here and the 25 day exponential moving average is red and then the
fastest one is the 15 day exponential moving average and that is in blue
that's the blue one here alright and the reason that you can use three moving
averages is because if you just use two moving averages like for example the
blue and the red which are the 15 and the 25 you get a lot of noise here
they're right on top of each other sometimes you get some false signals you
don't get clear breaks over here you got it you know the the 15 going kind of
below and kind of above below above there right on top of each other
practically same with over here you get some false signals and you might not
even be sure when to buy when to sell so what you can do is add a
third moving average here I've added the 50 in addition to the 15 and the 25 all
right and so since I want to be clear as to when I'm gonna buy or take a long
position instead of just deciding well I'll wait until the 15 the blue goes
above the 25 the red one yeah again you got all these false signals here it's
not clear when it breaks above so instead to make it more clear I'm going
to wait to take a long position or to buy the stock I'm gonna wait until the
15 goes above the green one the 50 that way you get a clearer a more clear break
all right so when the blue goes above the green you can clearly see it and you
don't get all those false signals you don't get all that muddled confusion
there all right so that's totally clear as to when you buy and if you bought
here you would have done quite nicely with that run up without eating up your
your trading account with Commission costs and just aggravation of false
signals here all right now I like to get out sooner rather than later all right
and this is a pretty good example we can see that Kroger stock has just dropped
rather sharply recently and so instead of waiting until the 15 goes below the
50 because by the time that happened it probably would have been too late all
right you see the 15 start to go toward the 50 and it doesn't really have a
clear break below the 15 doesn't go clearly below the 50 until the candles
are way down here and it's a little bit too late you're already in some trouble
here so I like to get out sooner rather than later all right I like to be safe
in my exits so instead what I'll do is I'll just wait until the 15 goes below
the 25 which happens clearly right here so it would have gotten out here and
of over here okay so when it comes to entries I like to be a little safer I
like to wait a little bit longer until there's a clear break and I don't like
all the confusion and so once again just to review you can wait until the 15 goes
above the 50 the green line and not the 25 so as to avoid the entries that are
too early and all that all the confusion here okay but to get out rather than
wait until the 15 goes below the 50 you can just wait until the 15 goes below
the 25 you'll get out earlier like right here and yeah sometimes you'll take
profits a little bit early but that's okay at least you'll be avoiding so you
could possibly sometimes avoid big sharp downturns and that's the idea all right
so this is just one example I want you to make your own decisions do your own
due diligence okay you know I cannot tell you what to buy or what to sell
this is just one strategy that I have found to be helpful with three moving
averages rather than just two so I hope this was helpful to you and what I can
do is offer more help to you if you need it or if you'd like it you can contact
me my name is David Modell and my email address is David Modell at gmail.com
I can help you to set up a trading or investing plan because you've got to
have a plan if you don't have a plan then you know you're just planning to
fail or if you're just not getting the results that you like you can contact me
again David Modell at gmail.com if you liked this video if you found it helpful
please give it a thumbs up and leave a comment in the comments section below
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educational videos thank you so much for watching and listening and I'll talk to
you again soon