The full title of this book by Steve and Holly Burns is
“Moving Averages 101: Incredible Signals That Will Make You Money in the Stock Market“.
In my review posted on Amazon.co.uk, I gave the book a rating of Four Stars. This means I think it is good.
Here is my book review.
Useful book for anyone wanting to understand investing around trends
By nature, I’m a value based investor but in this years of QE pumped up and interest suppressed markets, momentum is the only game in town until the financial system repeats the 2008 crash.
This book looks at very short term moving averages suitable for traders and longer term moving averages that will help guide longer term investors. It takes each popular moving average and explains when to use it and what the movements are trying to show.
The case for using tools to study momentum is built on the failure of human emotions to send the right investment decisions to the brain. Instead of running winners and cut losers short, our emotions encourage us to hold on to losers as they go lower but cut winners well before they’ve reached their peaks.
It is quite a hard book to read and understand. I find it much easier to look at a graph for a particular investment with the trend lines and see the pattern of true and false signals as you think through the trading implications. You can then repeat this exercise for more investments until you feel comfortable with the method/system you intend to use. Since you know that investors follow these movements, you’ll start to understand resistance lines more. Personally, I’m most interesting in the longer term 50, 100 and 200 day trend lines as I want to minimise transaction costs and the mental anguish about trading decisions.
This is a useful book for anyone wanting to understand investing around trends and, if you feel comfortable with the ideas, there are more technical books to read afterwards. Ultimately, what’s worked in the past isn’t guaranteed to work in the future but having money in the game does help you to focus on the signals and their implications.
It is available to buy from Amazon.co.uk and Amazon.com.
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