A Review of the Key Rules Associated with Moving Average Trading Band Trading
Calculate and maintain moving average trading band channels that use different moving average lengths and different time frames to reflect major-, intermediate-, and short-term trends of the stock market. Set boundaries to encompass between approximately 85–90% of stock market movement.
As a general rule, it is safe to buy penetrations of the lower bands of moving average trading channels with the expectation that, in the not-too-distant future, the market will recover at least to your buying level and probably some what higher.
As a general rule, the first rally following a downward penetration of the lower boundary of the moving average trading channel stops at the ...
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