Two moving average strategies

Most charting software allows you to chart more than one moving average simultaneously so you can add a tier of refinement to the moving average trading strategies I’ve outlined by using a shorter term average in conjunction with a longer term one. (I use the terminology shorter term and longer term here rather than short term and long term because the suggested time periods aren’t the same as those in table 5.3.)

As a rule of thumb, the longer average should be about three times the shorter one. It’s a matter of personal choice and experimentation, but as a starting point I suggest moving average terms for various time frames, as shown in table 5.6 (overleaf).

Table 5.6: shorter and longer moving average terms