Canadian CANNAINVESTOR Magazine November 2017 - Page 272

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Note: This is an American ticker for those looking to diversify.

What’s sweeter than sugar? Having indicators made to help you buy or sell. Let’s have a look at what swing traders tend to use in their toolkit. I would like to talk to you about the use of moving averages with SuragMade. While signals like the golden cross mentioned above are very good signals indeed, they are limited in the fact that they do not occur as often as our shorter term moving averages. This makes sense because the time frames are much wider when looking at the 50 - 200 day moving average crossover. If we use the 4-day and 9-day moving averages we will find more buy and sell signals. This can be useful if you prefer to trade more frequently. This can also have merit as a longer term investor too, as it can be used in finding a more precise time to go long when used in conjunction with the other indicators we have discussed.

How exactly do we use these moving averages? That’s an excellent question. As the smaller moving average crosses above the larger one then that is when we would want to buy. However, as the smaller moving average crosses below the larger one, then that is when we would want to sell (provided you are a trader). If we look at the last series of buy and sell signals you can see that we would be in a net gain position. You could reverse these rules when going short, however this is not something I recommend within the rather volatile marijuana sector unless you are prepared for the unexpected. What I would recommend if comparing different moving average values amongst your other favourite stocks and seeing which ones work best for you. It doesn’t need to be the 4 and 9 day moving averages, it could be the 15 and the 50 for example. We do not need to stick with simple moving averages either. We could use the Exponential Moving averages as well. I recommend experimenting with different numbers to see works best with your preferred stocks. Whatever moving averages you decide to choose, I do wish you better than average returns.

SugarMade Inc. (OTC: SGMD)

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