Moving Average Day Trading Strategy ( Strategy 1 will give you maximum profits)

In this moving average day trading video you will learn
1.How is Simple Moving Average calculated
2. Most Popular Simple Moving Averages
3. Simple Moving Average Day Trading Strategies
a. Trading in direction of primary trend
b. Trading against the primary Trend
c. Simple Moving Average Crossover
4.Simple Moving Average vs Exponential Moving Average

How is Simple Moving Average Calculated

Simple Moving Average is the average closing price of a stock.security over the last “x” time period
Eg: FB
Last 5 Closing Prices : 150, 152, 156 , 158, 162
5 day SMA= (150+ 152+ 156+ 158+ 162)/5 = 155.60

Most Popular Simple Moving Averages
Short-Term Trades: Day Trading
5SMA, 10 SMA, 20 SMA

Mid/Long- Term Trades
50 SMA, 200 SMA

Simple Moving Average Day Trading Strategies
Examples of Trading with the Primary Trend
Examples Trading against the Primary Trend
Examples of Simple Moving Average Crossover

Simple Moving Average vs Exponential Moving Average

Current EMA = ((Price(current) - previous EMA) X multiplier) + previous EMA.

The most important factor is the smoothing constant that = 2/(1+N) where N = the number of days.
A 10-day EMA = 2/(1+10) = 0.1818

For example, a 10-day EMA weights the most recent price at 18.18 percent, with each data point after that being worth less and less. The EMA works by weighting the difference between the current period's price and the previous EMA and adding the result to the previous EMA. The shorter the period, the more weight applied to the most recent price.

Examples of difference between Simple Moving Average vs Exponential Moving Average



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