Trading Strategies with Moving Averages

So, one of the biggest things when you guys are trading with a moving average,

an EMA, or any of those types of indicators, is making sure that

that moving average, or that key level, has been significant in the past.

You don't want to be trading a stock that

does not respect a key level. And it's very, very simple.

All we're gonna do is we're gonna go look back at how that

stock has reacted to those key levels, and this could be for anything.

You could use this on previous all time highs.

You could use this

on the 200 day simple moving average.

You could use this on the nine EMA. You can use it on anything.

You can use it on Fibonacci's, anything.

But you need to go back and make sure the stock is respecting that level with

a significant move. I have a few examples here.

The first one is going to be this Apple Weekly,

and I have the 200 day simple moving average.

That's gonna be the easiest level for me to show you guys.

But again, you could use this for anything. Nine EMA on a five minute chart.

Fibonacci's on a daily chart. Whatever it is. All time high, all time low.

A pivot level that you have.

You need to go back and make sure that the stock and its individual personality

has respected

that level. So if I was looking at Apple and I couldn't see this, and I was like,

I don't really know if this is gonna head down to the 200, but if it does,

will the 200 act as support?

All we have to do, zoom out and look left.

So I look left and I see we tested the 200 on April 7th of 2025,

and what was the reaction there?

High volume and a strong bounce.

That's the very, very important part, is that the reaction was strong.

If we consolidated on this

200 SMA for a while before bouncing,

that would not be as strong as the reaction that you guys are seeing on

my screen right now.

So this is a very strong indication that Apple, the individual stock,

respects the 200 SMA. We can continue to scroll left.

You can see the last time that we tested it, the bounce was also very strong.

It tested it in December of 2018.

It tested it and it immediately ran from 37 all the way to 53.

There were only three red candles on that entire move after we bounced.

So Apple has a history of bouncing off of the 200 day simple moving average.

So we can, moving forward,

look at this level as a very strong pivot level.

If this wasn't the case,

so maybe Apple had broken below and then broken back above and broken below,

then we would not wanna use

the 200 day simple moving average.

Let's go look at a few more charts here. So this is Google.

You can see that this had a reaction even before it got to the 200.

And then I want you guys to look at the volume that came after that.

We see all of these high volume green spikes

that came after this test of the 200 and the bounce that occurred.

So if I'm looking at Google here and I'm like,

oh, it's headed down to this 200,

I don't know if historically this has been

a key level for Google. I'm gonna go back and look.

All I gotta do, scroll left,

zoom out, and look and see how it's reacted in the past. Very strong reaction.

The buying was very significant here.

We bounced off of it and it ran from 141 all the way to 300, almost 400.

Very, very strong reaction. We can continue to scroll back.

This is a lesser reaction.

So this is an example of

one of those reactions that I would be less interested in or it would probably give

me a little bit of a worse outlook on the 200 day simple moving average.

We have this nice little test of it, initially a decent little bounce,

but then we retested a second time, we retested a third time, we consolidate on it.

It's not as aggressive of a reaction.

It's not as strong of a reaction. So it's not

something that's going to make me say, okay, the 200 day simple moving average is

incredibly strong at this current point.

But overall, if we keep scrolling out,

we have another test of the 200 and this one is very, very strong.

So right here,

we tested it and we bounced very,

very quickly and we had an aggressive bounce from about 52 to 82 fairly quickly.

So overall,

three of three times that Google has tested the 200, it's worked.

Two of the three times have been very aggressive bounces.

So that's how you can go back and evaluate how a specific

sock interacts with a key level.

And again, you could do,

you know, all time high. So at this point, this was all time highs.

We could draw in that pivot level and get it drawn real quick.

And then we stretch it across.

Let's remove the 200.

So this is just another way that you could use this strategy to kind of back test

if a specific indicator or a key level has been very, very strong.

So I know that this 150 level was all time highs on this.

And then we broke out, we retested it and both times we retested it.

The reaction was very, very aggressive.

It was a strong bounce both times once and then twice.

So what do I know about Google's personality at this point?

I know that when this retest previous all time highs, it has a history of a

strong reaction.

All time high was formed here in 2021.

We broke out, we retested it, we flipped it into support.

So I know the personality of Google has a history

of respecting previous all time highs.

So what does that help me with now?

Well, it helps me with being able to draw a few key levels.

Number one being this current all time

high that we just broke. I'm going to draw a new zone there. Boom.

This is my new all time high zone.

And what is currently occurring a strong bounce off of this all time

high level. So I drew this zone only because I knew that this has a history of

respecting all time highs.

And what's it doing? It's bouncing right off of that previous all time high level.

So if you guys take one thing from this, guys,

make sure that you are back testing, looking at individual stocks

and making sure that the indicator that you're using,

the strategy that you are using on those individual stocks has a history of working.

We started with the 200.

I went back and I looked, does this have a history of bouncing off the 200? It does.

So moving forward, I know that Google could bounce off this 200 and I could

feel fairly confident that that is going to be a strong pivot level.

I removed the 200.

I add in my all time high zone right here.

You guys can see this has a history of bouncing off of all time highs.

It has a history of flipping all

time highs from resistance into support.

So, moving forward, I could feel comfortable trading that setup on Google.

And here is the current move that's happening.

All time highs, resistance level,

broke out, flipping it into support. Let's look at a non example. So here's Tesla.

Let's throw the 200 up.

What do you guys see when I go back and I look at this 200?

I don't see it bouncing off the 200, having aggressive moves, and acting as a good

entry indicator.

We see this right here,

not bad, but then we see it spent quite a bit of time below,

and it didn't really cause an aggressive reaction. It wasn't acting as a key level.

So overall, Tesla is not a stock that I would

be interested in trading if it tested this 200.

That's a non example.

But if we go back to Google,

this is an example of a stock I would be interested in.

Same with Apple. I would be interested in trading Apple if it tested that 200 SMA.

Again, guys, this can work for any indicator.

I was talking about Fibonacci's.

We talked about previous all time high pivots. This will work for anything.

Just go back, test each individual

stock on the strategy or with the indicator that you're looking to use,

because you need to make sure that it has a history.

Each stock has a personality,

and its personality needs to line up with the strategy,

with the indicator, with the setup that you're trying to trade.

If a stock has a history of pennant breakouts, you need to be watching that.

If it forms again,

you need to be ready to trade that.

If a head and shoulders pops up on a stock,

and you look back and it has a history of forming those head and shoulders,

and they don't actually work out, you need to be aware of that.

So zoom out, look left, make sure that the indicator,

the setup, or the strategy that you're using has a history of working on

those individual stocks.

All right, guys, that's the education for today.

It's pretty simple, but I think it's something very,

very important that you should be keeping an eye on.