1. Use three moving averages.
Two moving averages are better than one moving average, and the combination of three moving averages is better than the first two, so it is called triple crossing method.
In the stock market, people often use the triple combination of 5-day, 10 and 30-day moving averages, and in the futures market, they also use the triple combination of 4-day, 9-day and 18-day moving averages. In the stock market, if five antennas are connected to 10 antenna and 10 antenna is connected to 30 antennas, then the buy signal is much more reliable than the combination of two moving averages. On the other hand, the selling signals sent by antenna 5 through antenna 10 and antenna 10 through antenna 30 are also effective.
4-day, 9-day and 18-day EMA combinations are the most widely used combinations in the futures market. In the upward trend, bulls should have a 4-EMA higher than 9 antennas and 9 antennas higher than 18 EMA; Conversely, the short positions are arranged in the following order: 4 balanced EMA, 9 balanced EMA, 18 antenna.
When the upward trend turns to the downward trend, the four-day moving average, the most sensitive short-term moving average, falls below the nine-day moving average and the 18 moving average, which is only an early warning signal for selling. Steady investors often have to wait until the 9-day moving average of the short-term moving average falls below the 18 moving average before they think that the selling signal is confirmed.
2. The moving average is applicable to any time scale.
Moving averages are mainly used for daily charts, but they can also be used for longer-term trend analysis and shorter-term research. The stock market has a combination of 13 weekly moving average and 30-week moving average, which can be used to judge the main trends and reversals that began a few years ago; In the futures market, the moving average can be applied to the daily chart to guide short-term operation.
When the market is in an obvious upward or downward trend, the EMA will give a clear trading signal, and its working state is the best. However, when the market enters a small fluctuation of the sideways index, the signals given by the moving average are often contradictory and very vague, and this time is frequent, reaching more than half or even more of a trading day.
Because of this feature, we should not rely too much on the moving average, but should combine it with other technical indicators.
3. Advantages and disadvantages of moving average
Advantages:
(1) When trading with the moving average principle, risks can be defined to minimize losses;
(2) When the trend changes and the market starts, the trading profit is considerable;
(3) The combination of moving averages can judge the real trend of the market.
Disadvantages:
(1) When the market is adjusted, the buying and selling signals are too frequent, which is easy for investors to step on the wrong;
(2) The best combination of moving averages can't be judged, and often changes due to market conditions;
(3) The buying and selling signals of EMA alone can't give sufficient basis, but generally rely on the assistance of other technical indicators.
4. The trading signal of the moving average-granby's eight trading rules
(1) The average line gradually changes from falling to market or rising, and the stock price breaks through the average line from below, which is a buying signal.
(2) Although the stock price fell below the moving average, it immediately rose back to the moving average. At this time, the moving average continues to rise, which is still a buying signal.
(3) The trend of the stock price is on the average line, and the stock price does not fall below the average line and immediately reverses and rises, which is also a buying signal.
(4) If the stock price suddenly plummets, falls below the average line and is far from the average line, it may rebound and rise, which is a buying signal.
(5) The average line gradually changed from rising to closing or falling, and the closing price fell below the average line. To sell signals.
(6) Although the stock price broke above the average, it immediately fell below the average. At this time, the moving average continues to decline, which is still a selling signal.
(7) The stock price trend is below the average line, and the stock price rises without breaking through the average line and immediately reverses and falls, which is also a selling signal.
(8) If the stock price suddenly soars, breaks through the moving average and stays away from the moving average, it may rebound and fall back, which is also an opportunity to sell.
Airspeed indicator
ASI cumulative swing index was created by Welles Wider, who tried to design an induction line by adjusting the myth of the index about opening and closing, thus representing the real market, and provided a quite incisive explanation for the breakthrough of pressure line and support line, the confirmation and deviation of new highs and new lows. Theoretically, ASI digitalizes the high point of shock, which really defines the short-term shock point. On the other hand, it is really powerful.
Buying and selling principle:
1. The stock price is at a new high and low point, but ASI is not at a new high and low point, indicating that this high and low point has not been confirmed.
2. The stock price breaks through the pressure line or support line, but ASI is not accompanied, which is a false breakthrough.
3. The significant high and low points formed before ASI are regarded as ASI stop loss points; When the bulls were long, ASI fell below the previous low and stopped selling; When shorting, ASI broke through the previous high stop loss.