What is the median runway?

Moving averages are a combination of many different periodic moving average lines, mounted on the same chart.

The idea behind using a cluster of these MAs is that instead of using 1 or 2 MAs on a chart, we will stick 6 to more than 10 MAs on the same chart. The benefit of this is that it makes it easier for traders to identify the trend and avoid noise signals.

The chart has a moving average ribbon attached

How to set up a median runway?

The most frequently asked question when using this tool is: "How much moving average should I use?"
• Some traders use about 6 moving averages, for example, MA 10, 20, 30 ... to 60.
• Some other traders may use more, with around 10 or more MAs.
So how much is enough? To get the answer, you need to note the following points:
• Do not install the MAs too thickly because it can be counterproductive, why will you know when we talk about how to use them;
• Do not install MAs with cycles too close together (for example, MA10, 12, 15 when you use fast MAs; or MA70, 75, 80, 85 when you use slow MAs ...) ;
• Avoid installing above 10 moving averages if you don't see real benefits;

It will depend on the type of trading brother, as follows:
• If trading short-term, should choose moving average cluster with a period below 30;
• If trading medium-term, should choose moving average cluster with periods above 20 and below 80;
• If trading long-term, should choose moving average cluster with periods above 50 and below 200;

This doesn't really have too much of an impact when we use the moving average, so if you are familiar with what kind of moving average, just use it.

How to use moving average ribbon to determine the state of the market

1. The "open" MA strip often signals the end of the trend

When MAs start to stretch apart, also known as extended bands, it often signals that the trend has reached a climax, the possibility of an end or at least a correction.

MAs themselves are often "attracted" to each other, so when they separate for too long and long, traders should prepare for a potential reversal.

2. The "converging" MA strip is a sign that a new trend is about to form

As the MAs get closer together, it shows that the momentum of the previous trend has weakened, and a new trend is imminent.

One point to note is that the low period MAs will react faster than the high period MAs, so they will converge first.

3. The steady moving MA, the parallel is a strong trend signal

When MAs tend to move stably, and the distance between the lines doesn't change much, it is a sign of a strong trend.

Keep an eye out for the "gaps" between MAs

A lot of traders ignore the extremely important information between MAs, which is the distance between them. Instead, they only pay attention to moving MAs intersecting or "twisting" together.

While a fast MA line intersects with a slow MA revealing the direction of the trend, the distance between MA lines reveals the strength of the trend.

Now that we have covered all the ways to use the MA Ribbon, to close the article we have come to an example:

What information do we see from the MAs on this chart?

• Zone A (purple) shows MAs moving steadily, reflecting the strength of the trend.
• Zone B (pink) shows MAs widening, reflecting exhaustion of the upside momentum and a potential reversal.
• Zone C (orange) shows MAs converging, and after the price breaks above the band, we have a new trend