If you're an active stock trader, then you're likely familiar with technical analysis and the use of various indicators to guide your decision-making.  One such indicator that has gained popularity in recent years is the Simple Moving Average (SMA) . Specifically, the 50, 20, and 200 SMA are often referenced in technical analysis, and for good reason. In this blog post, we'll discuss why these moving averages are important and how they can be used to inform your trades. First, let's start with the basics. A Simple Moving Average is calculated by taking the average price of a security over a specified period of time. The period can be any length, but the most common periods used in technical analysis are the 50, 20, and 200-day SMAs. The longer the period, the smoother the moving average line will be, and the less sensitive it will be to short-term price fluctuations. Now, let's dive into why these specific moving averages are important. The 50-day SMA is considered ...

Candlestick charts give the visual illustration of the decision making process of major market players and highlights the emotions influencing their decisions.  The visual illustration provided by candlestick charts give candlestick traders the ability to see when the overall market sentiment is changing and to quickly act upon that change. By recognizing candlestick signals and reversal patterns, candlestick traders can position themselves on the right side of a trend and profit from a price action influenced by a news report released five or seven days later. Knowledge of candlestick analysis combined with technical analysis (support, resistance, trend channels, moving averages…) give candlestick traders the ability to identify the current market trend, recognize a change in market direction and place trades with greater confidence and greater results. So, what is the best candlestick pattern to trade? The kicker pattern . ...

In this article we will look at three key indicators used to identify and trade trends: moving averages, stochastics (and RSI) and On Balance Volume (OBV). Moving Averages Moving averages are important indicators used to analyze price movement and trend direction. Moving averages are simply the average of the closing price of a trading security over a given period of time. They are used to understand price action during a specific period of time, in order to identify overall trends. Because they are based on past price action, moving averages are considered lagging indicators. There are two types of moving averages that are generally used by traders and investors: Simple Moving Averages (SMA) Exponential Moving Averages (EMA) SMA is calculated by adding the closing price of a trading security during a specific period of time and then dividing by the number of days of that trading period. For example, when we look at the 21 SMA, we look at the average price of stock d...

Volume Weighted Average Price (VWAP) is a technical indicator that measures the average price weighted by volume. VWAP is typically used with intraday charts as a way to identify market trends and determine the general direction of intraday prices VWAP it can be used just like moving averages: When price crosses above it, it indicates that we are in an intraday uptrend. Stay long until price crosses below it. When price crosses below it, it indicates that we are in an intraday downtrend. Sell or go short when price crosses below it. Watch the video below to get the technical insights. Please note that no indicator should be used alone. VWAP is no different. In order to make a complete analysis you need to look at a variety of other factors, such as technical and candlestick patterns, breakouts or breakdowns, volume activity, and obviously, price action. Trading Risk Disclaimer All the information shared is provided for educational purposes only. Any trades pl...

Ichimoku cloud is a chart indicator used in technical analysis to identify support and resistance areas. The cloud is designed to provide entry and exit strategies based on moving average crossovers while giving a clear glimpse of bullish or bearish patterns. Moving Averages The moving averages used in the Ichimoku cloud are tenkan-sen and kijun-sen. Tenkan-sen is the 9-period moving average; Kijun-sen is the 26-period moving average. The tenkan-sen line (9-period) is the leading line; the kijun-sen (26-period) is the standard line. The tenkan-sen line (9-period) tracks price with more accuracy because of the shorter period of time it covers. In the Ichimoku cloud indicator, these two moving averages calculate the mid-point between the highest high and lowest low of a security between of the span two time periods, plotted six months into the future. When the tenkan-sen line crosses and moves above the kijun-sen it gives a buying signal. On the other hand, a sel...