I also mentioned that 5MA guide is good for day-to-day trade as 5 days are average normal contra day limit for most of the players. 5MA guide is very useful especially in bullish market.
Set 5MA and when price close below 5MA, it triggers SELL signal.
In psychological view, 5MA is average price of the 'market' within these 5 days and if current price drops below 5MA means contra players are at loss. Most of the contra players don't have cash to pick up the stock, which leads to force selling of the counter when they cut loss.
In bullish market, most of the bull flag formation does not drop below 5MA and the contra players will ride all the way by rolling over their contra holding. In this condition, price does not drop below 5MA and there will not be SELL signal for this particular stock.
Example:
It is very obvious we can use 5MA to set ROLL OVER and SELL signal for bullish market. The chart above is Lian Beng during bullish market. Now you believe even a child can win in bull market.
No point for me to post too many chart here. You can open EOD chart on yourself and experience the 5MA contra signal.
Note:
For some of the counters don't have much contra players, you need to adjust 5MA to 10MA or even 15MA for the signal.
