I like moving average signals for their power and simplicity in my trading and here is why:
- Moving averages are a way to smooth price action and quantify a trend.
- Moving averages are tools that can work on any time frame.
- They can remove your predictions and opinions from your trading and replace them with moving average signals.
- Unlike trend lines, moving averages are quantifiable facts not left to interpretation.
- Moving averages are simple to use in back testing systems.
- You can combine moving averages for crossover systems that are good at filtering out noise and volatility.
- Many legends mentioned moving averages in their trading like Ed Seykota, Jerry Parker, and Paul Tudor Jones.
- Moving averages are better gurus to follow than the talking heads on financial television.
- You can’t argue with their facts. Either price is above or below them.
- They have made me a lot of money during trends.
Here are my three moving average books: