Market timing is a Strategy to Predict the Market’s Future Direction

Your market timing strategy is critical to your success as a trend trader.

When the stock market rallies, 3 out of 4 stocks will move up with the market.

On the other hand, when the market sells off, 3 out of 4 stocks will decline with it.

Knowing this, doesn’t it make sense to time your trades to the market? YES!

Market Timing Using Moving Averages

One way to time the market is looking at the Moving Averages.
The first thing you want to look at is a chart of the Index. Look at the 10 Simple Moving Average(SMA) and 30 Exponential Moving Average(EMA) to determine if you should be focusing on long positions(Buy) or short positions(Short Sell).

Short Selling is very much an option of trading.

It is very much legal and it is ment to help traders, YOU, make money during the market is falling. So please don’t be cynical about short selling!

Here are the rules for timing your trades to the market using moving averages.

If the 10 sma is above the 30 ema, you should be focusing on long positions only.

If the 10 sma is below the 30 ema, you should be focusing on short positions only.

This simple technique could and can be implied upon individual stocks too, for identifying your trading opportunities.

This simple technique will tell you what type of trades you will be concerned with right now. It identifies the underlying trend to keep you on the right side of the market.

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Tagged as: EMA, Market, Moving Average, SMA, Stocks