The majority of models are founded on a moving averages system. Some of them are sophisticated and have many variables . Essentially all models draw a bead on the direction of a trend after it is manifested and will keep you in the market as long as the trend is unchanged . Some moving averages attempt to anticipate changes in trend . These types are profitable to the properly capitalized trader who can initiate a recommended position and many be behind more losing trades than winning ones .

1. What Are Moving Averages? Find Out With This Stock
Technical Analysis Course
The majority of models are founded on a moving averages system. Some of them are sophisticated and
have many variables . Essentially all models draw a bead on the direction of a trend after it is
manifested and will keep you in the market as long as the trend is unchanged . Some moving averages
attempt to anticipate changes in trend . These types are profitable to the properly capitalized trader who
can initiate a recommended position and many be behind more losing trades than winning ones .
A stock technical analysis course teaches that the rationale behind the moving average ( MA ) is in
determining when price direction deviates from recent average prices . If the price that is current stays
about the price average of the last 10 days, 20 days, or even 90 days the trend continues . The most
ordinarily observed average is the 10 day MA of the closing prices. The advantage to this method is
that the same weight is given to the price of each day. It is assumed that traders put as much importance
on the prices of last week as yesterday's prices .
The rules of reality are not obeyed here. The horizon of a short term trader is very limited . Commodity
prices do vibrate more rapidly than the prices of most other investment forms , so, usually the best
performance is from a shorter series .
An ideal MA should :
1) quickly see a big turn in a price trend and not several days after the turn
2) ensure that the MA plot is not too close to the daily price plots that people are lashed into minor
swings and consolidation .
3) the moving MA plot must be adaptable to the volatility of the particular commodity .
4) the MA plot should be response if the limit of the commodity is locked.
This approaches problem is that MA lines can be too lazy to show a reversal . Most of the time, the
trading decisions of moving average technicians by changes that occur in the price market based on the
line of MA. As the MA is more sensitive the smaller the amount and degree of the advance differential
and the buy and sell points will be greater, which leads to a lot of whip-saw and some small losses as
learned in a stock technical analysis course .
Of course , as the time span is shorter, the more sensitive is the moving average to a trend termination
of a reversal . New trends are acted on more quickly and getting established doesn't take as much time.
However , the trader pays for this sensitivity more often than not because , the shorter the moving
average the greater is the number of trades that will be made with the addition of greater commissions
to the whip-saw losses .
Therefore , when it comes to the price trend turn, there is a delay with moving averages . Many times
the delay is much greater than would be the case using P&L charting, simple charts, or point and figure
charting . The main advantage of this position is that the each trend of substance has the user
automatically put on board (as do all trend following systems .) More information like this can be
obtained from a technical analysis course.

2. Author:
Charles Drummond is a Canadian trader who has written nine books about trading and has created a
stock technical analysis course called “Drummond Geometry.” His biography and further information
about his work can be found at the stock technical analysis course website.