Your Power Plays Trial Includes:
- Full access from March 2-6 (Monday to Friday)
- 1-3 new actionable trade ideas
- Daily alerts with new ideas, updates on existing ones, plus updates on my strategy
- A complete weekly roundup on Friday covering all our names to ensure 100% transparency and accountability
All content is delivered by email, in plain English, so you always know what to do.
Have a question? Email support@t3live.com for help.
I Taught This Lesson at a $7,500 In-Person Event
If you do just one thing this week, it's to watch this video covering my approach to swing trading.
Because the fastest way to destroy your account is to ignore the trend.
I taught this lesson a $7,500 in-person event in New York City, and to thank you for joining my Power Plays service, I'm sharing it with you.
Because all too often, I hear traders say "I bought a stock, it had great earnings, and it dropped anyway."
And most of the time, the trouble could have been avoided if they focused on the chart.
On the flip side, traders will get scared out of great stocks like Alphabet (GOOGL) or Apple (AAPL) because they were scared out by a news story.
But if they'd just followed the chart, they'd have stuck with the stocks.
BTW, if you'd rather read than watch a video, you can read this following article with different swing trading case studies using moving averages:
How to Use Moving Average for Swing Trading - A Pro's Approach
I can't live without my moving averages.
They're my most important technical analysis tools -- especially when it comes to finding winning swing trade ideas.
My charts would be naked without them!
Moving averages help me determine:
I rate moving averages above news, economic data, earnings, and any indicator you can think of.
If I was a starting swing trader looking to build my net worth, moving averages would be my #1 focus. Because price never lies.
And through a series of new trading case studies updated for 2026, you will learn:
What Is a Moving Average? And How Are They Calculated?
The first thing you need to know is how moving averages are calculated.
A moving average is a stock's average price over a specific time period.
A daily moving average is the average of a stock's daily closing prices over a certain number of days.
(a weekly moving average would be the average of a stock's weekly closing prices over a certain number of weeks)
We'll focus on the daily time frame in this tutorial since we're talking about swing trading.
For example, the 50 day moving average on a daily chart is a stock's average closing price for the last 50 days.
Every day, the newest closing price in the moving average replaces the oldest, which is why we call it 'moving.' It changes every day.
Here's a chart of Nvidia (NVDA) with its 50 day simple moving average.
The #1 Myth About Moving Averages
You often hear people say "moving averages don't work" or "everyone sees the same exact moving averages on the same charts, so they have no value!"
But here's the reality: most serious technical analysts understand that a moving average is not the same as a trading strategy or even a signal.
I don't buy and sell purely because of a moving average.
But moving averages do help me read the trend which improved my decision-making process.
They are a big piece of the puzzle. Not the entire puzzle!
What Is the Difference Between Simple and Exponential Moving Averages?
There are 2 types of moving averages -- simple and exponential.
Each is calculated in a slightly different way.
A simple moving average is just what it sounds like -- a simple average of the stock price. (the closing stock price, specifically)
An exponential moving average gives extra weight to recent prices, so it does a better job of measuring the near-term trend.
Here's Google (GOOGL) with its 50 day simple (blue) and exponential (pink) moving averages.
The Moving Averages I Use for Swing Trading
Technicians and traders tend to focus on the 10, 20, 50, and 200 day simple moving averages, which you can think of as follows:
8 day simple moving average: very short-term trend
21 day simple moving average: short term trend
50 day simple moving average: intermediate trend
200 simple moving average: long-term trend
I use a slightly different set of moving averages in my own swing trading, and in my services like Power Plays.
8 day exponential moving average: very short-term trend
21 day exponential moving average: short term trend
50 day exponential moving average: intermediate trend
200 exponential moving average: long-term trend
I use these same colors on the charts below.
I use exponential moving averages in my swing trading because they are more sensitive to the recent price action, which gives me a better read on the short-term trend.
Going forward in this article, all moving averages will be exponential.
Is There a Difference Between an 8 and 10 Day Moving Average?
You may be asking "Scott, why do you use the 8 day moving average? Why not the 10 day?"
Most of the time, the 8 and 10 day moving averages will be very close together, as you can see in this ARM Holdings (ARM) chart:
So are they the same thing? Pretty much.
But here's what most people miss about moving averages:
It's not the exact moving averages you use that counts.
It's how you use your moving averages to find new buying opportunities, avoid trouble, and manage your risk.
When it comes to finding new swing trade ideas, I pay most attention to the 8 and 21 day exponential moving averages.
I stick with them, because my brain is trained to judge the action based on those time frames.
If I was using, say, the 10 and 20 day simple moving averages, I'd end up with similar results -- I'd just get there in a slightly different way.
Imagine you were training for a marathon.
What matters more?
How hard you work -- or your brand of running shoes?
The Power of the 8 & 21 Day Exponential Moving Averages in Swing Trading
Traders often ask me why I talk about the 8 & 21 day exponential moving averages so much.
Whether you see me on Fox Business, Twitter/X, or the Virtual Trading Floor®, you know I never go a few days without talking about my moving averages strategies.
It's because these moving averages are the most accurate short-term road map I've found.
And I value moving average more than any other analysis I see out there.
8 & 21 Day Moving Average Case Study I: The Bitcoin Turkey Trot
One of the biggest trading stories of the 2024 US Presidential Election was the surge in Bitcoin.
I'd been very bullish on Bitcoin for many reasons -- including the likelihood of Donald Trump winning the election. Plus the overall technical setup made Bitcoin feel like "the next China or Gold." Those sectors rallied big time earlier in the year.
So on October 11, 2024, I unveiled my "Bitcoin Turkey Trot" theme -- because I expected a big Bitcoin rally into Thanksgiving.
Why? Because the iShares Bitcoin Trust ETF (IBIT) surged above the 8/21 day moving averages. That was the spark that lit the flame. As you can see, IBIT rallied HARD into and after President Trump's victory:
The Bitcoin Turkey Trot was fantastic for my Power Plays service, where we were long IBIT, Microstrategy (MSTR), and Terawulf (WULF).
8 & 21 Day Moving Average Case Study II: The SanDisk Surge
Did you SanDisk's (SNDK) huge surge in early 2026?
It was the #1 SPX stock in 2025, so many traders thought it could not put in a repeat performance.
Yet the stock just plain ripped:
What's the lesson here?
Don't short stocks trending hard above the 8 & 21 day moving averages. It's the easiest way to blow your account up.
And if it's a heavily-shorted stock like SanDisk, be extra careful. You don't want to walk into a short squeeze.
Don't short stocks trending hard above the 8 & 21 day moving averages. It's the easiest way to blow up. @reddogt3
One of the harshest realities about swing trading is that you can be 100% right on the fundamentals and still lose money.
That's why I use the moving average rules you're learning about today.
But, if you do feel compelled to short, make sure you have an exit plan in case things go against you.
Or, think about using options so you can define your risk.
8 & 21 Day Moving Average Case Study III: The Redwire (RDW) Launchpad
Reddit (RDDT) was our biggest wins in Power Plays in late 2025.
Look at this unmarked chart and think about what you see:
When I look at it, I see aggressive accumulation.
The stock was volatile but it kept bouncing off the 21 day and rallying. That meant that buyers were stepping up at every turn.
Based on what you've learned in this guide so far, you probably know that:
1) This is the kind of trend you want to buy
2) This is the kind of trend that destroys short.
How I Use the 8 & 21 Day Moving Averages to Manage My Market Exposure
You just saw how a trend above the 8 & 21 day moving averages signals strength in an individual stocks.
Now you will learn how to use the 8 & 21 day moving averages to reduce your risk in front of possible market declines.
I have two primary approaches to the market: a Portfolio Approach and a Tactical Approach
When the SPY is trending above the 8 & 21 day moving averages, I am in what I call a Portfolio Approach.
I'll hold 10-30 long positions in individual stocks and options, with heavy exposure in tech stocks. Earlier in my career, I would hesitate to have so many names on at once, but I've improved my management skills quite a bit over the years.
When the SPY breaks the 8 & 21 day moving averages, I get in a Tactical Approach.
I start taking profits, I sell longs to which I am not committed, I put on short hedges, and I keep a close eye on the exits.
Portfolio Approach
Tactical Approach
Here's a chart of the SPY with its 8 & 21 day moving averages:
As you can see, on May 3, 2024, SPY reclaimed the 8 & 21 day moving averages with a big gap up that held.
Interestingly, on that day, the market received 2 pieces of good news.
First, Apple (AAPL) announced a major stock buyback program.
And second, we had a very strong nonfarm payrolls report.
So the market gapped up on two big pieces of good news. And that gap held.
Think about that situation.
Would it be better to be long multiple stocks showing relative strength? Or to get short the market?
Obviously, it would be smart to be long.
The lesson: if SPY gaps above the 8 & 21 day moving averages, and holds that gap, pay attention! The market could be on the verge of a powerful trend change.
But, there are times to step aside, right?
Let's extend that chart a bit:
SPY put in a very nice rally until it gapped down on July 16.
And it did not fill the gap.
Then, it broke the 8/21 day moving averages.
That's 3 signals to lighten up long exposure, or think about getting short.
How I Use the 50 Day Moving Average for Swing Trading
If a stock (or an index or ETF) loses the 8 & 21 day, I look next to the 50 day.
As I noted earlier, the 50 day moving average tells me about the intermediate trend.
In other words, I watch to see if a stock is heading down to no man's land around the 200 day (bad), or rebounding back up to test the 8 & 21 day (good).
As I noted before, I use the 50 day average to judge the intermediate trend.
50 Day Moving Average Case Study: OIH
The VanEck Oil Services ETF (OIH) was a major winner in 2025 and 2026, taking many traders off guard with its huge gain.
As you can see on the chart above, OIH refused to break below the 50 day for any extended period of time.
That told traders the intermediate trend was strong.
Then it started a fast uptrend over the 8 and 21 day into early February. (right side of the chart)
How I Use the 200 Day Moving Average
The 200 day moving average also plays an important role in my stock selection process.
If a stock is below the 200 day, I avoid using it for long swing trades.
This is because names under the 200 day are technically broken, and hard to trust.
Once a stock or ETF loses the 200 day, there is no telling how far it could fall.
So I might play these names on very short time frames, but I won't stick with them unless I have a very specific, and very powerful catalyst in mind. And I'll always have an exit plan.
200 Day Moving Average Case Study: UNG
2024 was a good year for most major sector ETFs. Natural Gas (UNG) was an exception.
For over 2 years, the chart screamed "why bother?"
And by now you know why.
Because it was stuck far under the 200 day moving average, hitting one new low after another.
The problem with names like this is it can be tempting to try to pick bottoms.
But you never know just how low they can go.
So again, you can trade names like this short term.
But think twice about hanging on unless you have a clear catalyst. And always have an exit plan.
Thanks for Reading!
I hope this in-depth lesson gave you some valuable insights on how I view price action.
And I hope it helps you understand the daily content I send to my Power Plays subscribers.
About Scott Redler
Scott Redler has been a professional trader since 1999.
After 8 years of successful trading, Scott co-founded T3 Companies, LLC in 2007 and began serving as Chief Strategic Officer of both T3 Live and T3 Trading Group.
As the financial crisis began, Scott became a recurring guest on CNBC, repeatedly warning investors of the danger ahead.
Today, Scott remains a professional trader and regularly appears on CNBC, Bloomberg Television, and Fox Business.
His technical analysis work has been featured by numerous media outlets including the Wall Street Journal, Reuters, MarketWatch, and Investor’s Business Daily, among many others.
Scott has trained traders all around the world and has appeared in documentaries by the BBC and China’s CCTV-2.
Scott's Positions as of 2026-02-09 at 11.06.13 AM
Copyright © T3 Live LLC. All Rights Reserved.
Contact Us | Terms and Conditions | Privacy Policy | Refund Policy | DMCA Policy
Scott Redler is an associated member of T3 Trading Group, LLC (“T3TG”), a SEC registered Broker-Dealer & Member of FINRA SIPC. All trades made by Scott are placed through T3TG.
T3 Live, LLC is a financial publisher that disseminates information about economic, business, and capital markets issues through various media. T3 Live is not a Broker-Dealer, an Investment Adviser, or any other type of business subject to regulation by the SEC, CFTC, state securities regulators or any “self-regulatory organization” (such as FINRA). Although T3 Live and T3 Trading Group, LLC are affiliated companies by virtue of common ownership, the companies are managed separately and engage in different businesses.
The programs that T3 Live distributes (including the “Virtual Trading Floor®,” articles, commentary, videos, blogs and social media postings) are for informational and educational purposes only. No one should consider the information disseminated by T3 Live to be personalized investment advice, a recommendation to buy, sell or hold any investment, an offer (or a solicitation of an offer) to buy or sell any investment, or the provision of any other kind of advice that would require T3 Live to register as a broker-dealer, investment adviser or similar entity. No one associated with T3 Live is authorized to make any representation to the contrary.
T3 Live provides information that viewers of its programs may consider in making their own investment decisions. However, any viewer will be responsible for considering such information carefully and evaluating how it might relate to that viewer’s own decision to buy, sell or hold any investment. Such decisions must be based on that viewer’s individual and independent evaluation of his or her financial circumstances, investment objectives, risk tolerance, liquidity needs, family commitments and other factors, not in reliance on any information obtained from T3 Live.
Statements by any person (whether identified as associated with T3 Live, T3 Trading Group, or any other entity) represent the opinions of that person only and do not necessarily reflect the opinions of T3 Live or any other person associated with T3 Live.
It is possible that any individual providing information or expressing an opinion on any T3 Live program may hold an investment position (or may be contemplating holding an investment position) that is inconsistent with the information provided or the opinion being expressed. This may reflect the financial or other circumstances of the individual or it may reflect some other consideration. Viewers of T3 Live programs should take this into account when evaluating the information provided or the opinion being expressed.
Although T3 Live strives to provide accurate and reliable information from sources that it believes to be reliable, T3 Live makes no guarantees as to the accuracy, completeness, timeliness, or correctness of any such information. T3 Live makes no guarantee or promise of any kind, express or implied, that anyone will profit from or avoid losses from using information disseminated through T3 Live.
All investments are subject to risk of loss, which you should consider in making any investment decisions. Viewers of T3 Live programs should consult with their financial advisors, attorneys, accountants or other qualified professionals prior to making any investment decision.
The risk of loss in trading options can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage that is often obtainable in options trading may benefit you as well as conversely lead to large losses beyond your initial investment. Past results are not indicative of future results. No representation is being made that any account will or is likely to achieve profits similar to those shown.
T3 Trading Group, LLC is a Registered SEC Broker-Dealer and Member of FINRA SIPC. All trading conducted by contributors associated with T3 Trading Group, LLC on the Virtual Trading Floor® is done through T3 Trading Group, LLC. For more information on T3 Trading Group, LLC please visit www.T3Trading.com.