Moving averages are my most used indicators. They smooth out the volatile price action found in most of the stocks I trade. There are all different kinds of averages: simple, exponential, volume-weighted, front-weighted and more. The challenge is figuring out who and why anyone is using a particular moving average. So here’s what I got.
The most watched averages that I can tell are the trilogy of simple moving averages: 20-day short term average, 50-day medium term and the 200-day long term SMA’s. I believe you’ll see more charts with one or all of these averages than any other combination.
As I am a faster trader, I use faster averages. My mainstay are exponential averages, the 3, 8 and 34EMA’s. Here’s an example of my chart using these averages. 
In practice I would buy when the 3EMA crosses above the 8EMA, near the green arrow, and sell when it reverses back down, near the red arrow. What I actually did though is sell when the big red candle formed on Feb 23rd. It saved me a few bucks, but you can see even if I waited for the cross down it would still be a profitable trade. Another buy signal has formed on March 31st, although I did not take that trade.
Take note! The same sell and buy rules can be used with any pair of moving averages you choose to use based on your type of trading. Always remember, It’s not the numerical value of the moving average or time frame that is “magic”, it is the consistency of your use of your moving averages or time frames of choice for entry and exits.
Sometimes, entranced by the screens, watching equities, options and futures change colors, charts moving in a wave, and indicators pointing in every direction, I just have to scream....
