Strategic moving average trading techniques are well worth any trader’s time and effort.  There are so many different ways to use them however.  The question always comes up — which ones?

I would go so far to say that moving averages (MAs) are the most common indicator available to traders.  Every charting platform has many different types.  This post focuses on the simple and exponential moving average.

We have a novel approach to using MAs.  I like to combine the basic concepts of the Spotlight Power Trader and Counter Punch Trader to my strategic moving average trading techniques.

First of all, we take advantage of exhausted buyers or sellers and then trade in the opposite direction.  By using our simple to read and understand ‘exhaustion dots’ we can easily see these areas appear on the chart.  When these ‘dots’ appear within a certain proximity to our chosen MA, we have the first ingredient to a very reliable trade setup.

Then we wait for two more things.  We want a price bar to close on the right side of our Balance line, up and above for long trades, down and below for shorts.  Finally, we need the price to confirm our assumption by continuing to move in the direction of our trade a certain amount which actually gets us into the trade.

    1. Exhaustion Dot indicator (from either Spotlight or Counter Punch)
    2. Balance Line from Spotlight or Signal line from Counter Punch
    3. Price action confirmation
    4. Other corroborating concepts (subsequent action moves, tested tradeplans)

I have created a short video series that talks about advanced usages of this concept and how we use it with our Spotlight Power Trader system.  It can be used the same way with Counter Punch as well.

Strategic Moving Average Trading Techniques


I also discuss other ways to use the 20 sma as an excellent pull back trade tactic in my new #1 best selling book on Amazon, Day Trading QuickStart Guide.  If you are a beginning trader, this is one of the easiest strategic moving average trading techniques you can learn.

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