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Another rule that you could use with moving average lines is the I guess the moving average rule is
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what is called it's an alternative to the more popular crossover rule.
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So you're not looking for when it crosses over, you're basically looking for one the the moving average
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starts to bend or change.
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So you would look at it to call column into a trend when you have changes in actually the moving average
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line.
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So uptrend or downtrend is starting to make that change either way.
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So if there's an uptrend, if the moving average is less than today, today's moving average is less
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than yesterday's, you could start calling an end to an uptrend with that.
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And the opposite, of course, would be a downtrend that's been down trending.
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The moving average today is higher than yesterday.
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So you're basically your most recent data point and then looking at your overall trend.
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And so the advantage of this is you're not looking at crossovers, you're just strictly looking at the
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moving average line over the period of time.
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And that helps, as far as you can call it, into a trend faster than with a crossed over.
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Moving averages always are a lagging indicator, but you're able to kind of see where that change is
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occurring on the line as opposed to waiting for crossovers and prices is what you're looking to do and
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still suffers from lag.
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It still suffers from whipsaws, but it is all true.
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And you can use some of these filters we talked about as well to establish filters or rules around that
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as far as using this without the crossover of the price, but looking at when the basically when the
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moving average itself starts making some changes and we look to this graphically, you can see here
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you can see how it's kind of in this this curve right at this particular moving average, they can look
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different this.
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But as you look along the curved line, you can see as it starts to flatten out over time, you can
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see that's when the moving averages starting to change.
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And you can see up in the upper left there what's a 50 day moving average?
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And, you know, the moving averages at one hundred thirty eight dollars and ninety five cents in this
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example.
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So when you start seeing, you know, things are coming up less than that, then that might signal a
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change in that upward trend that we're generally seeing with this thing.
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If we start seeing that number going going down, that might show a downtrend there.
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And as you can see it, depending on the length of time here in this graphic that you choose, you have
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a 50 day moving average and a 200 day moving average.
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And of course, the longer the time period, the prices will differ, too.
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But if you look at the curves, you can see where the top line at the far right, you might see it more
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of a downward trend on the far right of the blue where the right is actually starting to trend upward.
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A little bit of an upward trend as they start to move towards each other.
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And so that's kind of giving you a kind of conflicting, conflicting messages.
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Right.
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And that can happen.
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So, you know, that time frame length can really impact that.
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The more time you have, the more the decision will be delayed as far as making a change and you want
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to take that in consideration.
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And again, you can use this with other filters.
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You can use this with other indicators to decide what you want to do.
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I personally, I like the crossover rule.
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It's much more stylish.
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It also seems to be easier to comprehend and easier to see to than.
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But if you want to look at something, where might you indicate the trend is changing?
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Sooner you can use this moving average and just look at the moving average itself and not really looking
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at the prices.
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