Bulls and Bears

We scan the battle of bulls and bears on the 50-day average

Places a 50-yard line for football fans are the ideal place to observe how the game unfolds. The same thing happens when traders focus on 50-day moving average. It is a no man's land between the bulls and bears, and offers an excellent view of the playing field market. Many readers are familiar with how the crossing between the 50-day and 200-day Moving averages give a signal of a new bull or bear pulse.

Let's explore how the 50-day Moving Average is part of a broader trade analysis, and why should I place the indicator (or its intra-day equivalent) for each graph, with whom you work. Keep in mind that the above examples are not specially selected stocks, so do not ?????? smoothly as we would like.

You can spend weeks watching the schedule before the price rise is not ideal for 50-day Moving Average. If you've done your homework then the entrance to the trade would be an ideal time, rather than the ideal price. For example, the rollback can get a minimum of many bars before you receive a reliable signal of purchase.

Traders must choose between the ideal price and ideal time in most of their inputs in the market. The ideal price is composed with high volatility, when the price tends to an extremum. The ideal time is to stand aside until the graphical model is not set up for traffic. Trading at a price of reducing the risk, but requires more patience. Trading on time, takes a higher risk in exchange for the chance of an immediate movement.

Juniper Networks has grown from its October level. The action has set a maximum of $ 15 three weeks ago and started to recede. Please note, as it did June 24, GEO-down after 50-day Moving Average and then fill out the GEO. The question is whether there is an opportunity to buy now, when it is pushed from the support.

Aggressive traders could enter into the market near the minimum of 24 June, suggesting that the 50-Day Moving Average endure and provide a decent recovery. This level is the ideal price now. But the ideal time is still not yet come, because there is no way to tell whether the correction is over.

The chart shows the three-wave correction to the decline, rebound and re-decline. Typically, market corrections make three or five waves, but the schedule does not tell us what type to expect. Therefore it makes sense to wait for forming a graphic model, which will give us the signal to buy. It did not occur until a lower maximum correction is prorvut the top of the channel. That would be an ideal time to enter the long position.

Correction Altera began in exactly the same as that of the Juniper. She 1-2-3 - wave decline to a 50-day moving average and the cannon. But then she turned around and broke the support of its third wave. This gives traders valuable, but the conflicting information. Offer ends wave range, which is often preceded by a strong turnaround. But the latest wave has violated the interim support at 50-day moving average.

The conflict provides two interesting business opportunities. The first - the game of "Pinball" between 50 - and 200-day moving average cost. Please note, as June 27, recovered from a bar back to resistance at the 50-day moving average and dropped. This level provides the ideal price to sell down to the 200-day moving average. Trader in this case covered a short position would be the difference between the sliding average, hence the game of "Pinball" failed to.

The second position is more powerful, but requires perfect timing. We know that the decline could be completed, giving us an ideal price to enter long position. But we do not have a signal to buy, so that it is dangerous to enter the market. If we are lucky, the signal will come when the price rises again to a broken 50-day moving average.

This small recovery is "the denial of a breakthrough," which decoy vendors and forcing them to close with losses. This, in turn, brings our long positions of substantial profit.

Sometimes, the ideal price and ideal time perfectly lined up together. This means that the schedule indicates a turn or a breakthrough in a very narrow range.

This is a rare coincidence may give very favorable conditions for the entrance. For example, look at the current decline in Goldman Sachs. The action continued to climb at the end of May and rose to $ 92. She then adjusted downward.

50-Day Moving Average rises to meet the price on the same level, where the breakthrough occurred last month. This prompts traders to wait for a turn with great volatility on the support. Turn provides an ideal price for that support must withstand the test first. It is also an ideal time, because the decline may reobrazovatsya in the V-shaped movement back to the top.

There are endless debates about how to calculate the 50-day Moving Average. The most common approach is only the last 50 bars, and divided by the total number. Technical analysts alter over the years results in many ways, trying to build a better indicator.

The most popular variety is the Exponential Moving Average, or EMA. This version is drawn to the double counting error in the original computation, and gives a value which is more responsive than the original formula. Because, the sooner a trader receives a signal, the higher the potential profit, Exponential Moving Average is now the most popular option in the professional community. This is also a unique way to assess the market. You can pre-mark graphic models that are of interest in the long run, that is, the market-based instruments, which should not buy or sell immediately. They happen in such a way that traders must comply with some analysis to find a good position.

The price activity in the region of 50-day moving average has provided many opportunities for short positions. Keep in mind that it is better to work on the trend at the opening position on this indicator. This means waiting until the price break below the moving average on strong volume, and then rises back to test it from below. The subsequent turn would send a signal to the sale of any trading platform.

Whole Food Markets in early May made a GEO-down on big volume. Note that a stock has already tested and cannon from the moving average after the first reduction. Then the action has continued to fall, breaking trend line and 200-day EMA. Now, when it stabilized at a lower price may be more movement back to the 50-day EMA.

This may allow for better short position than the first failed test. The action is now less willing to support it due to a significant reduction. The schedule also shows the merger of 50-day and 200-day moving averages, as well as the latest trend lines broken. These elements converge in a narrow price range, giving traders the opportunity for opening new short positions.

Interaction of Genzyme's 50-day moving average it is obvious at the first look at the schedule. Many times share decreased slightly below the moving average, it stopped at several bars and made a new leap to the top. As a trader determine the ideal time to open a long position and does not miss the next climb?

50-Day Moving Average works well in combination with the relative strength indicators, such as the Relative Strength Index Vayldera. GENZ graph shows a 14-day RSI, smoothed seven-day period. This setting can be used for any analysis of the daily closing prices. This reduces the market value of the noise and makes the response of the indicator less susceptible to rapid spread.

Notice how RSI is set up before each rising 50-day moving average. This shows that the action is restored after each rollback and attracts the interest of new buyers. The action returned to the rolling average of approximately six bars ago, but the RSI is still pointed down. This divergence warns traders to stand aside, because a strong recovery, it is unlikely to begin in the next few bars.

You can use the 50-day rolling average of all intra-day charts. In fact, this rolling average of 50 periods, based on the period of time, which is a bar. For example, the timetable for Yahoo! shows the 50-periodnuyu exponential sliding average with a period of one bar 60 minutes. Within-day Moving averages are exactly the same as their daytime counterparts with one important difference: at the intra-day markets are much more marketing noise.

This means that the price could jump through the sliding average number of times, although the support or resistance may remain not violated. Using the indicator for short-term analysis requires a well-read chart. With such a temporary format, the best signals come when the price falls to a much higher level, or rises from a much lower level of the rolling average.

Yahoo! shows that the best time to open a position frequently occurs after many bars, once the price reaches the rolling average of the first time. Try to wait until the next approach to the moving average before the opening of long positions. This latest decline awakens willing to trade from the double bottom, and often turns up gets enough momentum for a strong rally.

Traders must know when to ignore the 50-day Moving Average. Rule number one for the moving averages is that they work well on the market trend, but the bad side markets (no trend). But this can lead to confusion with the long-term sliding average, because their use requires a review of a great painting.

IBM has a strong rally between October and December last year. But since that time many of these movements were not. Notice how the 50-Day Moving Average crossing or at least hurt, eight times over the past six months. Signals received as a result of the price movement was doomed to failure, because the rolling average has lost its ability to predict the long-term sideways market.

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