Trading The 20 Day Moving Average

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mholte

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Apr 1, 2010, 1:39:23 PM4/1/10

to Trading The 20

I look for higher lows for long positions and just the opposite, lower
highs for short selling trades. I takes a while to get used to looking
for the right entry point. The entry is the day the stock crosses the
20 day to the upside, and hopefully on an increase in volume. That
just clarifies that others were watching the same trade and that
volume should continue for several days, pushing the stock higher.

The 20 dma is an excellent entry point for swing traders simply
because it gives you a clear place to put a stop loss order in, and
that is right under the 20. On a good trade the volume will drive
stock up immediately and you can then manage your stop order
accordingly.