BC TA

Moving Averages is a common indicator which most of us (novice/professional) use in the stock market for trading and investment.

This learning thread would be on
"𝙐𝙨𝙚𝙨 𝙤𝙛 𝙈𝙤𝙫𝙞𝙣𝙜 𝘼𝙫𝙚𝙧𝙖𝙜𝙚"

Like👍 & Retweet🔄 for wider reach and more such learning thread.

1/10

Basics of the moving average:

It takes average of the price for the duration we want.

So 10 days moving average means an average price of 10 days closing price.

Common types of Moving Average:
Simple, Exponential, Weighted.

Use only one type in your trading setup.

2/10
Different uses:

1⃣ Moving Average Crossovers:

Common strategy used by positional traders and investor in finding multibagger or good returns stocks.

Common crossover used is for 50 & 200 Moving Average.

Also, this is called as "𝗚𝗼𝗹𝗱𝗲𝗻 𝗖𝗿𝗼𝘀𝘀𝗼𝘃𝗲𝗿"

3/10
In this buy signal is initiated when lower MA (50 EMA) crosses above higher MA (200 EMA).
And exit or sell signal is intiated when lower MA (50 EMA) crosses below higher MA (200 EMA).

4/10
Let's see an example:
Pidilite Industries

Buying Price was 56 in 2009 and CMP is 2462 and still there is no selling signal.

44 times Multibagger or 4300% returns.

In lower time frame, it will give more whipsaw and more number of trades.

5/10
Setup looks easy, but is not that easy.

Sometimes stock stays in consolidation and it gives frequent buy and sell signal as seen in Airtel.

One way to avoid this noise is to use price action and look for the breakouts and then trade.

6/10
2⃣ Support or Resistance

Moving averages can act as support or resistance to stocks.

Let's look at an example where it acted as a support.

In #IEX chart, 100 Days EMA acted as a support multiple times.
Also, a live trade was shared on IEX:
https://t.co/CXa5CM4pnP

7/10
Let's look at an example where it acted as a Resistance.

Suzlon:

Stock faced resistance at 100 days EMA and it kept going down after EMA level.

Stock went down from 105 to 20 in two years.
8/10
3⃣ Finally Moving Average can be used as a Stoplosses.

~ For a buyer, if price closes below a crucial moving average, then buy position is closed in stocks.

~ For a seller, if price closes above a crucial moving average, then short position is closed in stocks.

9/10
I hope everyone got a taste of how moving average can be used.

These are not a universal rules one must follow. One can create their rule or follow someone else rules.

Only important thing is one must follow a fix rule instead of tweaking or changing setup frequently.

10/10

More from Yash Mehta

Over 99% of the option traders lose money in option trading because of not following proper Risk Management and Position Sizing.

In this thread 🧵, shared three steps that can help you in Option Trading even with small capital.

A complete course worth ₹ 50K for free.

1/ Creating a view based on some analysis:

It can be Technical/Chart, Option Chain or some Data analysis.

We have written a thread last week on what all the basic strategies you can use based on your view.

Checkout the thread


Now, after forming a view on a stock or index, don't directly jump to take the position.

Analyze the position first.

Some free tools that you can use are:
- Opstra
- @BeSensibull : Integrated with your Broker

We will talk on how to analyze Nifty Option trades from option selling perspective and what all things to look at.

Same thing you can replicate for Stock or Banknifty Options as well.

2/ Analyzing the position:

Let's say I am having bullish view on Nifty, then I can simply short Put Options and Hedge it as well so that margin requirement will reduce.

Let's assume Nifty is at 17000.

So I am looking to short 17000 PE and Buying 17800 PE.

More from Ta

Thread Master File -

All my threads will be listed under here


Need help getting better entries ?
Here is your thread


This is How you can be green on every trade via risk management


Thread on high profitability support and resistance setups & trigger points.


Here’s the Jimmy Momo Script, hope you all love it
Moving Averages 📚

💎SECRET INFO inside

🧠Great for both beginners & advanced traders

▪️ What are they?
▪️ Types of MAs
▪️ Why are they such a powerful tool?
▪️ How to properly use them?
▪️ My best SECRET EMA value?
▪️ Which Timeframe to use?
▪️ Advanced EMA technique?

1/20


▪️ What are they?

Moving average is nothing more than an average price of the last (value) of candles.

If we are gonna use an example of MA(50) it is gonna be the mean price of the last 50 candles

General rule:
Price above = Bullish 🐂
Price below = Bearish 🐻

2/20


▪️ Types of Moving Averages

1) Simple Moving Average - SMA
2) Exponential Moving Average - EMA
3) Smoothed Moving Average - SMMA
4) Volume Weighted Average Price - VWAP

There are a few more but these are the most important in my opinion.

3/20


I won't be going that much into detail about each of them in this thread but more so covering MAs in general.

The important takeaway is there are many methods of calculations and each offers bit different pros & cons

I'll leave experimenting with each of them up to you

4/20

▪️ Why are they such a powerful tool?

Because they help everyone, even newbies, that are just starting out, to easily & visually clearly identify trends without understanding the advanced Market Structure techniques.

Price above = 🐂

5/20

https://t.co/g5SneLNPh5

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#தினம்_ஒரு_திருவாசகம்
தொல்லை இரும்பிறவிச் சூழும் தளை நீக்கி
அல்லல் அறுத்து ஆனந்தம் ஆக்கியதே – எல்லை
மருவா நெறியளிக்கும் வாதவூர் எங்கோன்
திருவாசகம் என்னும் தேன்

பொருள்:
1.எப்போது ஆரம்பித்தது என அறியப்படமுடியாத தொலை காலமாக (தொல்லை)

2. இருந்து வரும் (இரும்)


3.பிறவிப் பயணத்திலே ஆழ்த்துகின்ற (பிறவி சூழும்)

4.அறியாமையாகிய இடரை (தளை)

5.அகற்றி (நீக்கி),

6.அதன் விளைவால் சுகதுக்கமெனும் துயரங்கள் விலக (அல்லல் அறுத்து),

7.முழுநிறைவாய்த் தன்னுளே இறைவனை உணர்த்துவதே (ஆனந்த மாக்கியதே),

8.பிறந்து இறக்கும் காலவெளிகளில் (எல்லை)

9.பிணைக்காமல் (மருவா)

10.காக்கும் மெய்யறிவினைத் தருகின்ற (நெறியளிக்கும்),

11.என் தலைவனான மாணிக்க வாசகரின் (வாதவூரெங்கோன்)

12.திருவாசகம் எனும் தேன் (திருவா சகமென்னுந் தேன்)

முதல்வரி: பிறவி என்பது முன்வினை விதையால் முளைப்பதோர் பெருமரம். அந்த ‘முன்வினை’ எங்கு ஆரம்பித்தது எனச் சொல்ல இயலாது. ஆனால் ‘அறியாமை’ ஒன்றே ஆசைக்கும்,, அச்சத்துக்கும் காரணம் என்பதால், அவையே வினைகளை விளைவிப்பன என்பதால், தொடர்ந்து வரும் பிறவிகளுக்கு, ‘அறியாமையே’ காரணம்

அறியாமைக்கு ஆரம்பம் கிடையாது. நமக்கு ஒரு பொருளைப் பற்றிய அறிவு எப்போதிருந்து இல்லை? அதைச் சொல்ல முடியாது. அதனாலேதான் முதலடியில், ஆரம்பமில்லாத அஞ்ஞானத்தை பிறவிகளுக்குக் காரணமாகச் சொல்லியது. ஆனால் அறியாமை, அறிவின் எழுச்சியால், அப்போதே முடிந்து விடும்.
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