How to Trade Markets with Simple Tools
InvestorEducation / Learn to Trade Dec 02, 2010 - 01:11 PM GMTBy: EWI
Improve your Financial Decision-Making Skills with Guidance from EWI Chief Commodity Analyst Jeffrey Kennedy.
As a high school freshman, I had a friend over to do math homework after school. It was cold in the room, so I stood on my chair and jumped up and down to try and bat open a closed heating vent.
My dad walked in and commented on the geometry problem we were working on, as I continued to struggle, unsuccessfully, to open the vent. Then, he handed me a ruler from the table and said:
"Simple tools are what separate us from the animals."
Without another word, he left us to finish our homework. Sadly, I don't remember any of the geometric formulas that I was trying to master on that winter's day. But you can bet that I have never failed to reach for a simple, practical tool since.
Here at Elliott Wave International, our technical analysts provide you with simple, practical tools that can help your analysis and trading.
EWI Senior Analyst Jeffrey Kennedy has spent years using and mastering — among many other technical trading tools — several well-known moving average techniques. In the process, he has even developed his own personal moving average method that he calls the "Stoplight System."
For a limited time, the first two chapters of "How You Can Find High-Probability Trading Opportunities Using Moving Averages" are available FREE when you join Club EWI.
In these excerpts, Jeffrey will teach you about:
- Defining the Moving Average and Its Components
- The Dual Moving Average Cross-Over System
- Moving Average Price Channel System
- Combining the Crossover and Price Channel Techniques
- The Most Popular Moving Averages
Like any good mentor, Jeffrey's insights are meant to help you become more successful and highly evolved in your endeavors.
Here is one of the charts showing how moving averages are similar to the Wave Principle in signaling buying opportunities:
This chart of Corning shows how each time the market moves into the price channel (marked by the short vertical lines), it signals a buying opportunity. When Corning's price breaks through the price channel (indicated by the short diagonal line), the trend has turned to the downside. So, we have a clear uptrend followed by a clear downtrend.
Remember, "Simple tools are what separate us from the animals."
We have extended our special offer -- for a limited time, the first two chapters of "How You Can Find High-Probability Trading Opportunities Using Moving Averages" are available FREE -- through December 6th. Sign up for a free Club EWI membership and gain instant access to the excerpt by clicking here!
This article was syndicated by Elliott Wave International and was originally published under the headline Simple Tools for Competent Trades. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
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