E Ma and Avwap

NinjaTrader 8
Custom

Timing Indicator

Moving Averages and Avwap

  • Purpose: Trading with moving averages involves using them as a tool to smooth out price data and identify trends, support, and resistance levels
  • Description:
    • These Plot relative timing ideas, based on the time frame being studied.
    • Seconds, minutes, hours, days, weeks, months and yearly are typically studied by serious traders.
    • Plots the price action as strength above these averages and weakness below these values.
    • Reversals may occur through crossovers.
    • Multi time frame analysis is essential to stay balanced.
    • Too much “air” suggests the market is ahead of itself relative to that chart.
    • User friendly, users can easily choose their own settings.
    • Gives added context to the chart being studied.
    • Moving averages intertwined reveal consolidation.
    • When these become stretched too far, they will revert to the mean.
    • Scrolling to find the best fit I call “finding the chart in play.”
  • NinjaTrader Use:
    • NinjaTrader has an easily customizable moving average indicator. Adding multiple indicators allows for comparing short, medium, and long term ideas.
    • Customizable parameters according to User’s preferred style (Position, Swing, or Day Trading) include color, length, offset, and even size/type.
    • I prefer EMA’s.
  • Practical Example:
    • On an ES chart we see a Bullish structure. The hierarchy is green, red, blue, magenta. In this formation, for this time frame, the sequence of short to long averages above each other is positive. The reverse would be true if the averages were inverted. 
    • As day traders, we focus on simplicity, using 3 to 5 minute charts as “normal”; shorter than that for execution, and deeper like 10 to 15 minute charts for setups and balance.
    • Swing Traders will be interested in 30 to 60 minute charts as a basis for balance.
    • The Avwap is shown as a green hash line in this example. Above is Bullish, below searching for support. I track them per session (RTH or ETH), and relative to the time frame (daily, weekly, etc.
    • These are one tool of many, and are important because they are widely used by Traders.