Do Professional Traders Use Moving Averages - Responsible Day Trading Review
Well, as we’ve seen, sometimes you want to avoid trade movements, but that doesn’t mean you should.
Now we’re going to take a closer look at average moving averages of stock prices over the past six months. First, our first average is from last February, when this post appeared as follows (click to enlarge)
The first one, last February is a big one. It shows that the average move of a stock by roughly 2.5 million shares at the time of this post is about 10 up from last February’s moving average.
If you remember, last February’s average is up for the first time since January 2012 and last spring saw moves of 1.4, a new record. It’s also the second year in a row that the average move by 1 of a stock over that time period was almost twice the average at the previous point in time.
The point here is that these averages are just a means of looking at stock prices under a moving average, they don’t capture a very meaningful number of moves that could change over an entire year, so we need to look at where a move is happening, as well as see if any changes are happening in it. Most traders use a moving index to track these averages, not trading on a single day for the entire year. And as most of you know, the trend is strong over the coming months. So while we’re talking about average prices, we’re not talking about normal historical movements.
Since the last trading day of the day before we moved our average price, we’re currently at 11.3 up from last February’s moving average.
So the fact that the average price of a stock now jumps 7 in just a quick week may be due to a combination of some combination of stock market moving averages (like last February’s) and a combination of moving averages. But if the average price of some other stock at the same time has jumped by 6 over the past six months (and the data seems to show that, that’s actually what we have here) then something really unusual may have happened.
The data below might be helpful, as it could help you figure out what’s happening with your own recent moves.
The good news here are the averages listed below by date in the order they occurred (or in the order in which they took place)
2 February 2012 Stock Price Up
(1) 1 March 2012 Average Move
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