50 Day Moving Average Strategy

• TRADE ENTRY
  

1. To enter a 50-day moving average trade, you should wait for a breakout.
2. Whenever the price breaks the 50-day SMA, you should open a trade in the direction of the breakout.
3. In most cases, the price action will continue in the direction of the breakout.

• STOP LOSS
  

1. If the price breaks the 50 SMA upwards, we need to go long, placing a stop below a bottom prior to the breakout. The opposite is true for bearish trades.
2. If the price breaks the 50 SMA downwards, we need to short the stock placing a stop below the bottom prior to the breakout.

• PROFIT TARGETS
  

1. Hold your trades until the price action breaks your 50-day moving average in the direction opposite to your trade.
2. If you are long, you close the trade when the price breaks the 50-day SMA downwards.
3. If you are short, you close the trade when the price breaks the 50-day SMA upwards.

• CONCLUSION
  

1. Stock price above the 50-day moving average is usually considered bullish.
2. Stock price below the 50-day moving average is usually considered bearish.
3. If the price meets the 50 day SMA as support and bounces upwards, consider a long entry.
4. Stock price meets the 50-day SMA as resistance and bounces downwards, consider a short entry.
5. If the price breaks the 50-day SMA downwards, you should switch your opinion to bearish.
6. If the price breaks the 50-day SMA upward, you should switch your opinion to bullish.