White Paper

Analysis of Erlanger Data Series:

Displaced Moving Averages

By: Philip B. Erlanger, CMT

II. Definitions

A "displaced" moving average (DMA) is simply a normal moving average shifted to the right or left. A displaced moving average can be computed based upon a stock's closing price, high price and/or low price.

A short-term DMA setup popularized by Tom Joseph (Trading Techniques, Inc.) involved 2 DMA averages. These 2 averages form a channel that make clear any trend change event, as well as the strength of a trend underway. The first average is a 6-day average of price highs displaced 4 places to the right. The second is a 6-day average of price lows displaced 4 places to the right.

III. Applying DMA's to Erlanger 2000 charts

IV. Applying DMA to the Erlanger Trading Rank

V. Conclusion

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