There are 3 Moving Averages that every swing trader needs to have on their chart and be familiar with.
First is the 20 MA, this Moving Average is going to tell you the short term trend of a stock. In a momentum run, the stock should not close below it. If you are short term trading you would use a close below it as your exit.
The second Moving Average you need to know is the 50 Period MA. This MA will give you the medium term trend of the stock. If you like to hold a stock for a least a few weeks to a few months the 50 MA is the one you will use most often.
Lastly the 200 period Moving Average is going to be the most important one for the trader who trades on a longer term horizon.
It is also usually the line in the sand as far as if the stock is in a bull or bear market. It is also the safest entry.
If get a close or two below it its best to get out as the trend is most likely changing.
Of course if you don’t have the time to do all this analysis, this is where using the services of a Professional Stock Picking Service will come in handy as they will do all the research for you.
Here are the two I use in addition to my own research: Microcap Millionaires and Jason Bond Picks Review
If Penny Stocks are your thing, then you should definitely check out Microcap Millionaires.
Regardless of which Stock Picking Service you use or if even if you choose to go it alone, please download my free eBook: “The 7 Habits of Millionaire Traders”
You can read all my reviews on stock picking services here:
If you are looking to open a brokerage account or looking for a better one, I wrote some reviews of brokers I have used and currently using.
OptionsHouse Review (Currently Using)
Scottrade Review (Used when I first started)
If you have any questions on sector analysis, feel free to contact me.
– Robert Walsh