The Stock Market Cheat Code: Moving Averages
Many people discuss moving averages... but how should you use them? Plus a look at some of the best setups in the market.
Moving averages are my blueprint for nearly every decision I make as a trader.
I believe they’re a gift for traders to use because they simplify the chaos of daily price action and turn it into something you can actually interpret and act on. There are tons of different indicators you can use but at the end of the day, none are as reliable as moving averages.
They especially amplify buying and selling decisions whether you’re a short term trader, swing trader, position trader, or even an investor. They can help you understand a few different things. If buyers or sellers are in control, if a pullback is healthy or a break of trend, whether a breakout is too extended, whether or not a stock will pull back again, and whether or not a trend in either direction is strengthening or losing steam. I want to be in stocks that are “surfing” their moving averages.
Before we get into it, I also want to let you all know I’ve already started working on my 2026 year ahead preview. Last year’s was a huge success with the vast majority of themes and many of the names outperforming the market by a wide margin. In that preview I highlighted the risk of a major correction in H1 2025 tied to Trump volatility and tariffs that would end up being buyable, why I expected solar and China to outperform, and more. The 2026 preview will be posted exclusively here on Substack and as we get closer to the end of 2025, I’ll share a full recap of how the 2025 preview performed. A few of the picks included OKLO, KTOS, NBIS, TEM, EOSE, FSLR, and more. If you want to review the 2025 preview, you can find it here. I recapped the 2025 preview here as well. The 2026 preview will be far more in depth now that I finally have a space where I can break everything down properly.
In the rest of this article, I’m going to walk through the moving averages I use, the reasoning behind them, the way I apply them in real trading, entry/exit strategies, and more. Moving averages can be a powerful tool but they’re only helpful if you understand how to use them properly.
Let’s dive in.