Check this out , no moving averages aren’t the be all and end all to trading but check out these moves the AT&T (T)
End of 2016 the 5 ema (green) crossed above the 20 simple (red)
This time we see the exact opposite trade. The 5 (red) ema crossed below the 20 (red) simple moving average.
You could have hedged or sold some shares $2.50 ago. Or what I often do is take notice, follow the sell off till it bottoms…then price usually move sideways. When price turns bullish and makes it move higher the moving averages will alert me. The 5 (green) ema will cross the 20 (red) sma.
I call my trade plan the money flow. I don’t short. I’m not against shorting I realiz it can make money. Look at this $gold chart only recently.
When the green line (5 ema) crosses below the red (20 sma) signals prices are in bearish trend. When the green (5ema) crosses above the 20 (red) sma it signals prices have turned bullish.
The moving average is just one indicator and used alone isn’t near as effective as combing it with additional indicators. I look for 6 indicators. I only need 5 to make a decision of price direction and or position size.