Customer Reviews

Moving Averages Simplified

5 star:		(1)
4 star:		(1)
3 star:		(1)
2 star:		(1)
1 star:		(2)

 

 

I'm new to investing/trading and attracted to less esoteric metrics such as moving averages. I though, wow, a whole book devoted to moving averages, this should be great. To my disappointment, this book is really trivial. You won't find any deeper insight here than you'll find in a few pages of a general book on technical indicators. Save your money and put it towards one of the more comprehensive books from Murhpy or others.

Like so many who retired with an IRA, I too spent the last year seriously learning stock investing. When I first started, a friend loaned me his "Moving Averages Simplified". I started reading then thought, this is to shallow and put it aside.

Now after 12 months and a min of 40 hours per week, reading, taking classes (note: Schwab has the BEST training videos), and learning technical analysis, I realized I made stock investing more complex and difficult then I needed to for a trend trader.

For a trend trader the best indicator for the market is using the S&P500's 50 and 200 moving average. It's that simple! Buy when the 50 crosses over the 200, and Sell when the 50 drops below the 200. And that is what this book is all about. In a very simplified way, this book explains the moving averages which may be the most important market indicator.

When I first tried reading the book, I didn't really have an open mind. I thought trading had to be complex. Recently when I reread this book, it all made sense. I have even reread it once again, to be sure I capture everything. Be sure to read the small side comments, they have very important learning tips! The book looks shallow, but it's not!

I have since dropped my subscription to some of the $$ charting services and now use Yahoo Finance and MSN Money for all my charting needs.

If looking for a book on moving averages, this is a VERY good training book. Good Luck trading.

Note: check out the S&P 500 chart for Dec 10-28 2007. The 50 dropped below the 200. Shorting the S&P with ETF short SDS made a lot of money.

For me, the book reminded me of the importance of paying attention to moving averages and changing from the standard 50 dma to others both shorter and longer. Also, the descriptions of price dips below a moving average that just started upwards is worth viewing. Like the prior poster said, he is new to this.

The Book is very simplistic. There are some interesting thoughts and comments. Almost half of the book is composed of comments on Cycles and the Glossary and Appendix and Advertisements. Unfortunately there are not many, if any, great books on using Moving Averages and how to Trade with them. The Best book on Trading with Moving Averages that I have found is quite old and maybe outdated in many ways is The Art of Low Risk Investing. Remember that moving averages are a lagging indicator but some of the Great Trend Traders of All Time use them to accumulate fortunes. The best thing to do is to look at Daily and Weekly Charts of Securities you are interested in and plug in various moving averages until you find some that speak to you. I have revisited the book after my first harsh review. I am more favorably inclined here months later after a reread. The one thing I like about the book is that it reminds me of the old saying "Trading is simple but it ain't easy." If you use Moving Averages, which you should, use them with some other somewhat reliable indicator or indicators because they lag badly.

Here are some of the topics it delivered on: Traders of every level will also discover how to:
-Calculate moving averages--including the Simple, Variable, and Exponential
-Use moving averages to identify price cycle bottoms
-Identify support and resistance levels with moving averages
-Spot trend changes with moving averages.

I agree with the author on the importance of moving averages being included in some way in every trading system, but the book does not present a clear use of moving averages. The problem may be that the author assumes the reader will understand the point he is trying to make with out much elaboration or that the fuzzy charts in the book will speak for themselves. Unfortunetly for me they did not. I received very little value for this book's steep price. You would do much better buying any of Dr. Alexander Elder's books or Stan Weinstein's book. This book is like a Cliff's notes on using moving averages, being little more than a compilation of notes from other books. By all means use moving averages to buy on pullbacks, but unless this is your very first book on stock trading I doubt you wll find very much value here.