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Should you use 10 MA stop for short term swing

5

 


When a stock has a momentum burst of 3 to 5 days, it explodes quickly in a short time period. As a result of this the daylight between 10 MA and the price increases. So a stop based on MA will put lot of open profits in play.
 As a general rule for 3 to 5 days swings using a MA of 10 day duration is not a smart idea. 

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5 comments:

Dellis hackers said...

Even a 5 Ma put lot of open profits in play.

Tom said...

Understood. So what’s your recommendation? It’s easy to say that you should be selling at the top in hindsight but how do you know that’s going to be the high in that burst?

Pradeep Bonde said...

Sell on 3rd day or profit targets after deep-diving average moves in a setup.

Tom said...

Got it. Day 2 as a member. I completely understand based on your strategy. Thanks for clarification!

SteveD said...

The 18 ema on a 65 min chart equals the 3 ema on a daily chart and is something I use.