Trading Moving Averages - How to Use Moving Averages

Moving averages help us to first define the trend and second, to recognize changes in the trend. That’s it. There is nothing else that they are good for.

Many traders will try and get cute using all kinds of various combinations and really it is just a waste of time.

You do not have to keep adjusting the period of a line on a chart hoping to find the Holy Grail. It isn't there!

I won’t be getting into the gory details about how they are constructed. There are about a zillion websites that will explain the mathematical make-up of them. I'll let you do that on your own one day when you are extremely bored out of your mind! But all you really have to know is that a moving average line is just the average price of a stock over time. That's it.