I Use a Moving Average Almost Nobody Uses

A lot of people put the 13, the 18 or the 50 moving average on their chart.

I get it, those are the ones everybody uses.

I use a moving average almost nobody uses, and I know it’s crazy, but when I back tested it, it had some of the best directional value I’ve seen, and it’s how I read support, resistance, and whether a move is going to keep going.

I’m going to give you that number and show you exactly where it sits on my chart, plus the one thing I check before I get into a trade so I don’t walk straight into chop.

Set it up once and you’re looking at exactly what I’m looking at.

It’s the 40… which I have now coined the Voz 40.

A moving average is just the average price over your last so many candles, drawn as a line, and it counts candles, not days. This is my QQQ chart and it’s a 5-minute chart, so the 40 here is the last 40 five-minute candles, roughly the last three hours of trading.

I only keep four lines on my chart. First is VWAP, volume weighted average price, and that’s the navy line. It’s the average price traded today, weighted by how much traded at each price, and it’s actionable right now because it builds all day long.

Second is multi-day VWAP, and I make mine this creamsicle color. It’s the same idea drawn over previous days, and I set mine two days back, because we’re day trading, why do I need information from yesterday, let alone a month ago?

Institutions watch it though, so it’s good to have on your chart.

Then I use two moving averages, and they’re both EMAs, exponential moving averages, which lean more on the most recent candles than a simple moving average does. When you’re day trading, I personally like the EMA over the SMA. The 200 is the lime green, which everyone uses, and the 40 is the purple dotted line.

Now say the spot where you want to get into a trade has VWAP or a big moving average sitting right on it. You can expect there might be some chop there, and some traders like to wait for it to clear while others get in knowing there’s going to be some turbulence, but either way it’s good to know there might be some obstacles.

If you want my chart, open TradingView, go into indicators and add VWAP, then multi-day VWAP set two days back, then the EMA twice, once at 200 and once at 40. Put it on the 5-minute and you’re looking at exactly what I’m looking at.

Rock On,

Voz

P.S. NVIDIA reports Tuesday, and on Nov 18, 19 and 20 I’m trading it Game Plan style, included for every member. I’d love you in the room for it, so I’m taking $500 off at checkout through Monday at 9:30 AM ET as a thank-you for coming to the Open House.