# Getting Started with Technical Analysis | 7-16-24

### Hull Moving Averages: What They Are & How to Trade Them

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## Hull Moving Averages: What They Are & How to Trade Them | Getting Started with Technical Analysis

Hello, everyone, and welcome to Schwab Coaching. My name is Cameron May. I'm a senior manager here at Schwab, and this is Getting Started with Technical Analysis. And today, we're getting into something that I have never discussed in this webcast series before. It's a new moving average, new to this series, known as a whole moving average. So we're going to talk about how it's constructed, how it might be used to generate trades. We're going to be looking at some examples on charts. But why in the world might we need a new moving average? Well, this moving average attempts to solve some inherent issues with some of the other ones. So it should be a good discussion. I'm looking forward to it, as always.

But before we can get into that, let me first of all say hello to everybody that's already chatting in out there on YouTube. Great to see Bob and Ranjit, Krishna, Austin, Robert, Roger, Greg, Kevin, everybody else. Thanks for joining us week after week. We really do always appreciate your attendance and your contributions to the discussions. We also want to welcome anybody that might be here for the very first time. If you're here for seeing your first live stream, welcome aboard. If you're watching on the archive for the first time, great to have you here. And if you are watching that archive, regardless of whether it's your first or your third time or 100th time watching, if you'd like to join us in the live stream, you can set your calendar for 2 o'clock Eastern time on Tuesday afternoons.

All right? So we're here every Tuesday. The markets are open. And as a final heads up, my very good friend Barb Armstrong is going to be hanging out in the chats with us. Barb is going to be answering any questions that are posed by the live stream. So if you have any live stream attendees that I can't get to during the natural flow of the presentation, thanks for being there, Barb. And Barb and I would also like to issue an invitation to you. If you're not following us on X, please do. It's a great resource; it doesn't cost anything. Best place to connect with your favorite presenters in between the live streams. So, you can find Barb there at BarbArmstrongCS. You can find me on X at CameronMayCS. All right?

But let's get into it. And of course, risk is an important consideration. Let's go ahead and get started. Let's bear that in mind as we get into this. These disclosures are important. The information here is for general informational purposes only. Should not be considered an individualized recommendation or personalized investment advice. Investing involves risks, including a loss of principle. Schwab does not recommend the use of technical analysis as a sole means of investment research. And of course, any investment decision you make is solely your responsibility. Okay? So let's set the agenda. Very basic agenda. As I mentioned, we're going to be talking about whole moving averages. So the first thing that we're going to do is talk about, you know, what makes them different from the other moving averages.

What is the logic of even having them in the first place? Then we're going to get into the construction of the whole moving average. And we're also going to make sure that we use some example charts to talk through how the whole moving average might be used to generate trade signals for a trader planning a stock trade. All right? So a good list on the agenda. Let's kick it right off. As I mentioned with what is the purpose of this thing? Well, the logic of the whole moving average comes from what some traders see as an inherent shortcoming of some of the other more quote unquote traditional moving averages. So we're going to start our discussion here with a simple moving average. So I'm going to come up here to our little beaker icon.

If you need to learn about simple moving averages, we've discussed those in previous webcasts. You can go to our Trader Talks channel, look at the playlist for getting started with technical analysis. And you'll see earlier discussions of simple moving averages along with another one that we're going to be using. So I'm going to click on the Edit Studies icon here. And let's just type in SIM for a simple moving average. Let's add that to our chart. And I'm going to make one customization here to the example moving average. By default, it's going to be using the nine days or periods worth of data. I'm going to extend that out just slightly. Let's choose about 20. OK? So let's click OK. Let's click Apply.

And now let's pop over here and just grab a stock to go through this discussion with. So let's go to our watch list of S&P 500 component companies. Looks like Apple is our largest right now. I'll just start our discussion with that. That'll work. OK? So here's Apple. And we've applied this 20-period moving average. It is a simple moving average. So all it does, very simply, is it looks back over the last, in this case, 20 days since we chose 20, as our period. And it's telling us, just here to the right, what the average closing value for Apple has been over the last 20 days. Sometimes the closing has been above $220. Other times it's been below $220 in the last 20 days. But the average right now is 220.21.

And over time, that average changes. As average prices advance, those averages are going to be reflected in this moving average line. OK. So that's known as a simple moving average. But to some traders, it has some benefits. Other traders see it as having, or it might even be the same traders, as having some inherent flaws. Now, all of this is going to be in the eye of the beholder, to some extent. But one criticism, a common criticism, of a simple moving average is that it lags. Of course, when we're using 20 days, or 10 days, or 50 days' worth of data to generate an average, that average is going to lag behind current. So we can see that lag effect in the fact that our average is here.

As prices, more current prices, are advancing ahead of that average, there gets to be a pretty good distinction between where the current price is and where that average price is. And as prices change, well, price can just change faster than average prices. So that's what we call a lag effect. And for some, they see that as a problem that might need to be overcome for the planning of their trades. So taking that as an assumption, how might we adjust for lag? Well, one thing that a trader might do is just use a shorter term period. If the problem is that we're using 20 days' worth of data to come up with our average, well, maybe we just use 10. That would be more sensitive to current price behavior, and it would eliminate some of that lag.

So we could come up here, click on our little beaker, and we're going to take a look at our average. And what we're going to do is we're going to click on the beaker icon. And my apologies, I am going to go a little bit deep in the weeds to explain the logical underpinnings of maybe the need for a whole moving average for those who use it. But just be aware, as we move deeper into the discussion, we're going to get to, OK, forget why it's built, forget how it's built, how is it used? And I think just about everybody's going to follow along with that. And for those that have an interest in this tool, that might be the most important element, OK?

But in any case, one thing that might be done with a simple moving average is just to speed it up, make it more responsive so it doesn't lag so much. And the way that we speed up most indicators is just to shorten them. So we could go to our simple moving average. And for example, instead of looking over the last 20 days, we could incorporate the last 10 days. Let's change the color of this 10 to red so we can make a distinction between the two. Click OK and click Apply. So what we see here now is a more responsive simple moving average due to the fact that it's really only looking over the last 10 days.

So the average price over the last 10 days is $2.28, which is much closer to the current price than the average price over the last 20 days, which is $2.20, which is more distant, experiencing more lag. So we've possibly solved, to some extent, one problem but introduced another. A problem with a shorter simple moving average is that it's just more volatile. It is less smooth. It's more prone to changing direction very rapidly. And that can generate a lot of false signals from moment to moment. You could move from one day, it's going down. Next day, it's going up. And the very next day, it's heading down again. That's a problem for some traders who are looking to this for, to some degree, of guidance. So we have lag possibly partially solved.

Smoothness has now become an issue. All right, so maybe there's a different way we can do this. Maybe instead of shortening our moving average, maybe we use a different type of moving average. For example, there's one called an exponential moving average, which, because of the way that it's constructed, it is constructed to adjust for something. And we're going to do that by adding some of that lag. So I'm going to change. Let's first of all hit Apply so we've gotten rid of our shorter simple moving average. And let's add that exponential moving average. And let's make it fair. Let's make this exponential the same length as the simple. I'll make it red, though, so we can tell the difference. So now what we're looking at is an exponential moving average, which is designed to adjust for lag.

It's designed to be more responsive to recent price activity compared to more distant price activity. And it does its job to some extent, but I think what will stand out to a new user of a simple versus exponential is they're really not that different, right? Is there a huge difference between these two from day to day and from week to week? No. Now, if we lengthen these out, if we're using longer moving average, if we're comparing, let's say, a 200 simple versus a 200 exponential, there will be more obvious differences a lot of the time than on these shorter ones. But it did help with the lag a little bit. But it came right along with the same problem, quote unquote problem, as a shorter period, simple. It's more jagged.

It's less smooth and more prone to introducing false signals or just, you know, let's just say signal reversals going from, let's say, down to up to back down again, that sort of behavior. So problem not necessarily solved just yet. So that brings us to the whole moving average. I'm going to remove our exponential moving average. Let's apply that. So we're just back to our 20 period simple moving average. The whole moving average was constructed by its creator. His name's Alan. A-L-A-N. Alan. Alan Hull. He constructed it to address, hopefully, lag and smoothness. I will say in this series, sometimes I get into exactly how indicators are built. I'm going to spell it out, but I'm not going to try to reconstruct the moving average, you know, by running all the calculations for it, because I will admit for this one, it's one of the more complicated indicators in really understanding how it's built.

So I'm going to leave it at that. I'm going to leave it up to you. You can use the information that I provide. You can Google some supporting information afterward if you like to, but let's add a whole moving average here. Let me click on our edit studies. Now, how many of you have used the whole moving average? Jim, Ranjit, Speak Truth, Ard, Joran, Daksha, Naresh, Kevin, Bob. Anybody out there using this right now? Either paper or real money, I don't know. But let's select the whole moving average from a list of our indicators. All right. I'm going to add that to our chart. It defaults actually to 20, okay? Alan had different ideas for default lengths. So our default here is different. Sandeep says every day. That's interesting. Okay, Sandeep.

But let's click apply. And you notice when we added a 20-period exponential, it wasn't very different from our simple. So you might think, oh, this is just going to be very similar to the simple. Nope, it's actually quite different. There's our green line, that's our simple, and here is our whole moving average. Very different. A couple of things that you'll notice is if you look at its current value, is there much lag at all compared if we compare the current value of the whole to the actual price of the stock? The current whole value actually right now is a lot better than the current value of it's pretty much overlapping, it's not exactly the same. 234.36 is the current moving average value. 234.02 is the current price of stock.

Tiny pennies of difference. So really, has lag been adjusted for? Yes, quite effectively. Now, it's not always this precise. Definitely, you'll see price get away from the whole moving average to some extent, but only rarely more than the simple moving average. Now, what about smoothness? Well, now, if you look at the whole compared to the simple, now the simple actually looks a little bit bumpy, a little bit jagged compared to the whole. The whole is much smoother in its presentation. Now, just because we've accomplished an achievement, we've accomplished an achievement. Now, if you look at adjustment for lag and just we've accomplished an adjustment for smoothness, does that mean Cameron has put in the grade A stamp of guarantee that this is better than a simple moving average? Nope.

That's not going to say that. But just to know, just, you know, those are what we're trying to solve for. So that's the logical underpinnings of the quote unquote need for a new or different moving average. How is this done? Kevin says I use it, but I have no idea how it's constructed. Well, Kevin, I'm going to go over this really quickly because I could go deep in the weeds on this one. I could spend the whole time explaining the math of it all. But I just thought, let me just write this out in steps as cleanly as I can. So this is my own language. All right. It's an abbreviation of basically the five steps that generate a whole moving average. But step number one is just to choose a period length.

Okay. So using a 20 or a 50 or whatever. Then we're prepared for step number two. So step number one was easy, right? We're using a 20. As a matter of fact, let's go ahead and get rid of our simple now that we're going to be talking about the whole for the rest of our discussion. There we go. But step number two is to calculate two what are called weighted moving averages for using that length of time. So, what is a weighted moving average? Well, it's just instead of using a simple moving average, which gives every, every day or every candle, every closing value for the selected timeframe and equivalent amount of weight or significance, it weights the most recent price as more important than the most distant price.

So if we're using a 20 period whole, if we're looking back over the last 20 days, the current day is going to be 20 times more heavily weighted than the first day. That's the way it works out. Okay. But we're actually going to calculate two weighted moving averages. If you can, if you can forgive me, I'm not going to type out weighted moving averages here. Okay. Then, and by the way, what's the purpose of using a weighted moving average? Well, let's make it more sensitive to current price. So it's an adjustment for lag. Again, it's not the only adjustment within this algorithm algorithm. But with those two moving averages, well, these are the two moving averages. We have a full period or a full length WMA and a half length.

Okay. Full length just means we're going to compete, going to calculate, if we're using a 20, we're going to calculate a weighted moving average for 20 days. And then we're also going to calculate, in this case, half of that, a 10 period weighted moving average. Okay. Then we're ready for number three. Number three is we take that half WMA and we multiply it by two. That sounds like we're just going back to a 20 period moving average. Nope, they're going to have different values. So it's not just, so we're going to be, you know, doubling, you know, the, the 20 period moving average, but we are then going to subtract the full WMA. What is this doing? This is a smoothing element. So we already have a lag element in the fact that we're using weighted moving averages.

And this introduces a smoothing element. Lag and smoothing are the two things we're trying to adjust for. Now, number four, here we go. We're going to get the square root of the period to use in calculating the final weighted moving average. So instead of using the, you know, the, just the period value itself, we're going to use the square root. Now, if you're trying to follow along and you're trying to mentally recalculate a whole moving average in your brain, using these steps that I'm providing, good luck to you. This is probably something that if anybody even has the curiosity to investigate, do it after the webcast. Too much heavy lifting, but I did want to get it on the recording. So if somebody wants to go back, they can do this.

Okay. Now, finally, we're going to use that result to calculate a third weighted moving average. All right. So those are sort of the logical steps for the calculation. If you just want to see the algorithm, I jotted it down for my own benefit right before the webcast started. So that I could type it out for you. It's the whole moving average is a weighted moving average times two times the weighted moving average with the n that represents the period divided by two minus the weighted moving average times n, times

eccentrics, let me get this just written out there. We all square root times. And. There we go. There you go. There's the out there's the algorithm that generates it. Okay.

Let's get the square root and let's calculate a third weighted moving average. No, I'm not going to do that. I just wanted to spend five minutes, get this on the recording so people can know if they want to. Because I went out and just watched a whole bunch of YouTube videos. I always like to learn what others are doing in their instruction. And I just saw holes in the way that everybody else was explaining things. I'm like, why does nobody want to tackle this? I know it's a lot. Okay, I'm going to tackle it. I'm going to get it on the recording. There it is. Okay. Art says usually that type of stuff puts me to sleep. Well, let's wake everybody up and say that's not the fun part.

Let's get to the more interesting part, which is how this thing is traded. So we understand why it might be generated, how it's generated. Now let's talk about how to use it. Get rid of that. There we go. It's on the recording. I've fulfilled my role as an educator. Now let's switch roles to trader. Okay. So how might this be traded? Well, some of you, if you're a little bit more eagle-eyed, you might have looked and noticed that unlike an exponential or a simple moving average, this has two colors. Let me help you out with that. I'm going to go up here and customize it a little bit so you can see the colors a little bit. When we want to customize an indicator, we can just go to the beaker icon, click on the little gear, which allows us to customize things.

And I'm going to change this from purple and green, which are not actually purple as a down, doesn't even make sense. Let's change that to red, green and red. Let's also make this a little bit thicker. Okay. Let's click okay and click apply. Now Trade and Grow just asks the question, so is this the best, let's throw that in air quotes, the best moving average? So forget the rest, not what I'm saying at all. My role here is to explain how things are built, how they might be built, and how they might not be built. So I'm going to go ahead and use the best and worst. Okay. So I don't even attempt to categorize things in best and worst or on a rising or falling scale. Nope.

But does this help for you to see that there are phases here to this moving average, which identify to traders who use them, potential uptrends and downtrends. So let's talk about how this might be traded and how it's very different from a traditional moving average. With a traditional moving average, you're going to see that the traditional moving average, for example, it's quite common to look for a price rising up and through a moving average as let's say a bullish entry signal and price falling down and through the moving average as a bearish exit signal, or maybe a bearish entry signal for doing bearish trading. Anyway, that does not, that is not intended for use with this moving average because conceptually, hey, you're welcome. Speak truth says, thank you for covering some of the deep specs of indicators.

For those of you who find it interesting, this is, you know, it's a beginner level webcast series. So I always get a little bit nervous explaining how some of these more complicated indicators are built because they can be more complicated in the way that they're built in the way that they're used. It might actually be less complicated, but I also feel like it would be not good of me as an educator to just sort of skip that part. Oh, who cares how they're built? Let's talk about how they use them. All right. But you can, if you want to want to, you can skip through on YouTube archives past the part where we're building the thing and just talking about how it might be used.

Anyway, the problem with using price crossovers with this moving average is that price crossovers conceptually rely on lag. The point of, oh, well, price has just moved up above a moving average. Maybe that has value as a signal because price is staying ahead of that moving average. It's not supposed to with this one. So if we're trying to use price crossovers, eyeball that. How many false signals on price crossovers are there? How many times do we see the candle pop up and through and then just go right back down below, back and forth through this moving average? It's not intended to be traded that way. So how might it be intended to be traded? Well, one common approach, and this comes right from Alan Hall says, look for the trend reversals.

So when we see a shift from a downtrend to an uptrend, which simply is, you know, if we're, if we're sloping down from one day to the next, this will generate a change in coloration. We changed it to red. The default is purple. I made it red so we can see it more readily. But you see when the whole moving average starts to go down, it turns to red. And for some traders, they look at those as signals. So what do you think a bullish trader might be looking for if they're using this whole moving average? Well, they might look for red shifting to green. So like right here, let me maybe switch my tool over to an arrow, but you can see right there. Let's do that one.

And as a matter of fact, let me show you a little customization we can make to an arrow. I'm going to, I'm going to right click on this little arrow. Let's edit its properties. Let's change it to a good extra large arrow. Let's make it blue. Let's have it point down instead of sideways and then save all of that as a default. Click okay. So there's our arrow. So you can see here's our transition from red to green. And if that's the entry signal, where do you think a trader might look for exits on Apple? Well, it could be there. There are a couple of potential exit signals. It could be that we're just getting up to a previous resistance. Right here. You can see that that was a previous support all through here as well.

So maybe right up around that 180 level, or they may just wait for a different change in trend, like right there. Okay. So green to red. We're shifted to red here. We might be sitting on the sidelines, sitting on any, if there were profits, sitting on those, waiting for the next signal. Here we go from red to green and exit again. On the next red. And most recently, here's a final signal switching from red to green. And we're still green right now. Okay. So that's great. You're going to, you're probably saying, wow, Cameron, this is the perfect indicator. Look at all the money somebody might've made trading this. Wait a second. Maybe not. Right. There are other times when this green signal looks right back here before this cherry pick starts.

At the end of April, Gabriel says, 'Is there a script to set this up?' Nope. Gabriel, it's just an indicator. You just add it through the studies and then just customize it using the customized tool right there on the, on the studies pop-up window. Okay. And you can just go back and watch through the archive for this. You know, as long as the archive is posted after this webcast should be, unless there's some technical pickup that prevents it. But, but like, here's a change from red to green on his big white candle of the day. And depends on how late in the day you got in, a trader might've been getting back out right here. Not so good. Or what about here versus exiting here? Yeah. The line went up, but the candles went down.

So yeah. The username dad says it's easy to see a past trend, right? Yeah. So we have the, we have the, we have the, we have the, we have the, we have the, we have the, we have the, benefit of perfect hindsight for me to give these great examples right here that worked out perfectly. These not so much. Now they weren't necessarily killers of a portfolio, but there also weren't generating profits, but we can quickly go back and just look for Apple. How's this working historically? There's an entry. There's an exit. There's an entry. There's an exit. Those weren't too bad. This was an entry. Here's an exit. Probably not too bad. If we're entering here, getting out there a little bit of a profit right there, but you get the point.

So might there be an incentive for a trader to maybe filter, try to filter out some of this? Maybe what they're looking for is to filter out some of those unprofitable sort of whipsaw signals. Yeah. So what some traders will do is incorporate a second whole moving average to help define a longer term trend. So let me get rid of this drawing. Here. Matter of fact, let's just clean it all up. Let's clear a whole drawing set. Right click on any drawing, select clear drawing set, and it'll get rid of everything. Let's come back up here to our flask icon, type in whole moving average again, and let's add not another 20. That would do nothing. It would look like the same chart, but instead let's add a longer term, like let's say a 50.

Or actually since, let me see. Yeah, I guess 50 is okay. Let's just use 50. And let's use red to show down, green to show up again. Maybe to make them look a little bit different, let's use our 50. Let's make its width three, but change it to maybe a dashed one. So now we can tell the dashed one is going to be our 50. The 20 is going to be our solid line. Okay. So let's click okay. Let's click apply. And now what we're left with are two whole moving averages. One is a little bit more sensitive to more recent price activity. The other one's not necessarily used to generate signals independently, but its primary role here is to identify trend.

So if we have, for example, a period of time when the 50 is moving down, like we have right here, maybe the trader chooses to ignore green signals from the shorter term moving average. Does that make sense? Now, another way to express that is the trader may just look for both indicators, both of our moving averages to be green. So let's, let me, let me be more specific about that. Let me get my arrow tool again. Let's look back here. Okay. So, if we have a period of time, let's say December, let's say, let's say, let's say, let's say October, let's say, let's say, let's say, let's say, let's say, let's say, let's say October to November, our 50 period, pardon me, our 50-period is kind of moving sideways.

Our red is coming down, the 20 starts going up and our trend indicator confirms not much after that. Do you see that right there? As of November 3rd, both of those are now green. So a trader may look at that and say that day right there, we have both of them green. And so if that's the signal for when the trader might get in, well, when might they get out? Well, the green uptrend may actually extend a little bit too long for traders who use this signal. They may actually exit just the same time they were previously exiting when the 20 period starts to head back down again. So we need both greens to confirm an entry, the one green to signal the exit. All right. Let's see if we see further examples there.

Here, our trend indicator is still moving up. Our 20 period generates a green right about there. And then as we move up, the 20 starts to head down right here. Notice the trend indicator keeps going for another day or so. All right. Let's see. Is there another one? Now here's one where it doesn't, yeah, I don't think this one worked out. You'll notice our 20 is heading up. The 50 or the trend indicator starts to move up right here. So that would have been a signal. Let's use the candles. That one would have been a signal to get in right here. And then our 20 reversed right there. Yeah. That would have been a signal to get out right down here. So was that a, was that a profitable trade? Nope.

Have I just generated for us a perfect trade system? No, I haven't. Kevin, does this make JB's whole moving averages much more clear? Thank you so much. Yeah, you're welcome, Kevin. I actually, James was one of those that I went and rewatched. You'll see some similarities in the setups and the explanations here. I hope you don't mind. Doc just says you like the in-depth clarification of whole moving average. Yeah, I hope you don't mind that I went a little bit deeper. Yeah, and all those first 20 minutes aren't going to be for everybody. And maybe the quote unquote, you know, the more fun part of the discussion is toward the end. But I want to talk about how it's built. Then we talk about how it might be traded and go through examples where we see, yeah, sometimes it works.

And of course there are going to be times that it doesn't work. Okay. So anyway, I think we're recognizing this. Here's a green signal that came on the 20, but the 50 is still going down. This one's ignored completely. Here's a green on the 20. It went slightly green on the 50. That may have been one unprofitable signal still. So it filtered one, but left the other one. That's an improvement, but not perfection. No signal is perfect. Okay. So how do we do this? How about we just move on here and look at another one? Let's move on down to maybe Microsoft. Oh, forget all this. This is just previous information. Let's clear the whole drawing set. I thought I'd deleted that. That's okay. Anyway, that was from a discussion from last Wednesday.

DS Greg says, you like the realistic take on the signal? Yeah, no signal is perfect. Unfortunately, one very common theme as you watch things on YouTube, this is the best signal ever. You know, that's the thumbnail. That's the message that seems to be delivered in the presentation. It's just not true. There's no perfect signal out there. And as an educator, I don't have to sell something. My job is to just explain it. Mac, dad says, 'Is this similar to the MACD?' It's not similar to the MACD. Not really. Although James did do a presentation previously where he combined the whole moving average with MACD. Yeah. So let's see if we can use our signal the way that we have calculated this. First of all, how about we do the first one?

Let's come up here to our little beaker icon. Cause I think repetition really helps learning sometimes. Let's take off our 50 and just trade the 20. Is it possible that we could take off the 20 and just trade the 50? Some do exactly that. Yeah. But let's take off that 50 and let's say, you know, if we're trading the 20, there was a, there was an entry, and there was an exit signal. Let's see if we can get another entry signal. Let's go all the way back. Why not? Who knows where the first one came from? So, but there's an exit signal. Swing down, there's an entry signal right here. Right there. Exit here. Entry here. Exit here. Entry here. Exit here. Look at this, there's two of them right back to back.

Bang, bang. Another entry right there, exit entry, exit. This one's not profitable; neither's well, this one probably turned out to be up to here. Here's a quick whip-saw entry, exit. Depends on when we got out on that day, right. Entry, exit, whipsaw, right here. These are the frustrating ones could have been a pretty good loss right there, entry, exit, entry, exit. Not difficult, right. That's trading the indicator itself. What about if we combine? Let's clear up the whole drawing set. Let's come up here get some repetition with adding the longer-term again, and does it have to be a 20 and a 50? No traders will commonly experiment with different combinations. What's the difference between a 20 and a 50? What if we did a 10 for our short-term signal and a 100 for a longer-term trend identifier?

Maybe just sticks with those trends for a longer period, generates an even smoother trend identification, but it's less responsive, more lag that's a trade-off. Okay, let's come up here to our edit studies; let's add that hull. We now know how to customize. We click on the little gear icon; let's make it a 50 red downslope, same thickness. Would it be helpful visually? To make it, maybe make it more thick, the thicker one is the longer one style, okay click apply click okay again. So, here's our trend indicator so right here what what benefit might there have been here? Well, we may have been a little bit late on this signal on the entry waiting for the trend indicator to come up here, we did get both actually confirming right there that there would have still been a whipsaw right there, entry exit.

This one that whipsaw would have been ignored because the trend was down, entry here instead, this whipsaw would have been ignored. Does that make sense? We're getting signals from the shorter term. But, the longer-term saying, Cameron, ignore that one, okay. We're going up; we got a little whipsaw right there, but our trend was up. Yep, that trader would have participated in this one so um there are pros and cons to trading with the combination of the two. The pro is sometimes we eliminate frustrating whipsaw events; the con is that it can cause us to be a little bit later on some of those entries when trends are when those longer-term trends are trying to reverse. See this right here as an example back in October, I was saying Cameron, bye-bye-bye-bye, and I had to wait several days, I mean the hypothetical investor here had to wait.

For trend to confirm and so the entry came really much too late on that first signal, so is this a perfect adaptation of the trading system merely because it eliminates some whipsaw events. So we're going to wait for a couple of days and then we'll see those things through highs and lows and highs and lows. I've made some investments until I make $100 or less; it's not much additional, but if I can get from my variance to $800 and all that little bit to begin to gain on the deeper border, that's what I'm checking about today, right? So that's why I call them sites also. It's very heels of it; it's planted because so many of them in fine things.

Strangely, I think it's a good idea to use them and use them properly so that it's relatively safe for investors and investors thin and very quickly and then we've ended up asking the very first reputational stock Index, if you're not familiar with the index only indexing, IFR, indexing and I want to make sure that I covered; I think I did it yup, I don't see anything that I miss, that I wanted to make sure that I covered. So, if this is your first Elisa, yourself, an average; I hope you didn't mind a little bit of more in-depth discussion of conceptually why some traders turn to it over some of the more traditional moving averages like The simple and exponential.

I hope you didn't mind me taking three or four minutes to outline how it might be calculated if one has the desire to reconstruct the calculation or to understand the calculation. But what I really hope as a takeaway here is how it might be used to generate signals. How those signals might be tailored and also which signals maybe we have a habit of using on other moving averages which are probably inappropriate for usage on a whole moving average. Price crossovers, it's not what it's designed for. Okay. Hey, Kevin, you're welcome. Yes, Greg, definitely. If you appreciate the discussion, that's fabulous. We appreciate you giving us your time. But my time has come and gone. I'm going to let you go. But I do have some suggestions for you.

When these webcasts wrap up, that's not the end of the learning. We have other resources available in between these live streams. And when you're not watching the archives, you can go check us out, first of all, on X. Follow Barb and me on X if you would. Okay. Let me just show you that. Barb can be found on X. I can be found on X. It's the best place to connect with your favorite presenters. I can be found on X. I can be found on X. I can be found on X. I can be found on X. In between the live streams, you can find Barb there at BarbArmstrongCS. You can find me here at CameronMayCS. And this is where I can offer developing thoughts and not have to wait until a webcast pops up.

Okay. And I like the interactive abilities we have here on this platform. So follow us there. Also, make sure that you've subscribed to our Trader Talks channel. Okay. When we hit refresh, you'll see, there's our live discussion right there. So we can join live webcasts on our Trader Talks channel. You can also find the playlist for previous webcasts, and they're organized by series and by topics. If you want to go back through my Getting Started with Technical Analysis series, that's where you could find it there on the playlist. So follow us. It doesn't cost anything to follow on X or to subscribe to the YouTube channel. Click on that subscribe button down below. We have Exploring Thinkorswim coming up next, as Barb just chatted in a reminder. Thank you for doing that, Barb.

One final note that I want to make is thank you to, you know, we have over 100 people watching the live stream at the moment. And 46 have already given a thumbs up. That's nearly half. That's fabulous. If you like these presentations, give them a thumbs up. It helps us out in the YouTube algorithm. Helps, you know, promotes the webcast on YouTube. So it helps us. And, of course, it shows recognition that the webcast was appreciated. It also helps us know that we're on the right track. Lots of benefits to just clicking that thumbs up. So thanks for doing that. Everybody, go enjoy the rest of your day. Enjoy the rest of our webcast. I'll look for you again next time for another discussion of Getting Started with Technical Analysis. I'll also look for you on YouTube. But whenever I see you again, until that moment arrives, I want to wish you the very best of luck. Happy trading. Bye-bye.

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