Moving Averages and Stochastic – Not Trading Tools but Good Confirming Tools

QUESTION: Mr. Armstrong; What is your view of moving averages? Can they really be used for trading?

Thank you

KL

ANSWER: No. Moving averages and stochastics are nice confirming tools. They are incapable of forecasting a high or low. They also do not reflect magnitude of a move. They can be a useful confirming tool, but nothing to actually enter a trade on that is consistent.

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