# Change From 200 Day SMA

## Understanding the Change From 200 Day SMA Percent Filter

This filter compares the price of the last print for a stock to the average closing price of that stock for the previous 200, 50, 20, 10, or 8 trading days, expressed as a percentage.

The "Change From 200 Day SMA (%)" filter measures the percentage change of a stock's current price from its 200-day Simple Moving Average (SMA). This filter is widely used to gauge the long-term trend of a stock and its current position relative to this trend. Here's a breakdown of its components and how it's used in trading:

Simple Moving Average (SMA)

Definition: The SMA is an average of a stock's closing prices over a specific number of days, continuously updated as new daily prices become available.

200-Day SMA: This particular SMA is looked at to assess the long-term trend of a stock. A 200-day period is commonly used as it provides a broad view of the stock’s performance over approximately 40 weeks, which is nearly the duration of 10 months of trading.

Change From 200 Day SMA (%)

Calculation: This value is calculated by taking the current price of the stock, subtracting the 200-day SMA, then dividing the result by the 200-day SMA, and finally multiplying by 100 to get a percentage.

Interpretation: Above 0%: If the stock's current price is above its 200-day SMA, the percentage change will be positive. This indicates that the stock is performing better than its long-term average, suggesting a bullish trend. Below 0%: Conversely, if the stock's current price is below its 200-day SMA, the percentage change will be negative, indicating the stock is underperforming relative to its long-term average, suggesting a bearish trend.

## Change From 200 Day SMA Filter Settings

The settings of each Trade Ideas filter are defined in the Window Specific Filters Tab located in the Configuration Window of your Alert/Top List Window.

Here is how to setup the filter in your configuration window:

• Set the min value to 1 see only stocks that are performing better than their long-term SMA.

## Using the Change From 200 Day SMA Filter

Several trading strategies can be employed with the Change From 200 Day SMA filter. Here are a few examples:

Trend-Following Strategy: This approach involves buying stocks that exhibit a significant positive change from their 200-day SMA, signaling an uptrend, and selling or avoiding stocks with a significant negative change, indicating a downtrend. The strategy capitalizes on the momentum of the market, aiming to ride the wave of an existing trend for potential profits.

Reversion to the Mean Strategy: This strategy is based on the premise that stocks significantly above or below their 200-day SMA will eventually revert to their mean. Traders look for stocks that are excessively deviated from the 200-day SMA to either buy (if below the SMA) or sell/short (if above the SMA), anticipating a correction towards the average.

Breakout Strategy: Investors watch for stocks that are breaking away from their 200-day SMA with increasing momentum, as evidenced by a rapidly increasing positive change. This signals a potential new trend or a strong continuation of an existing trend, prompting a buy decision. Conversely, a significant drop below the 200-day SMA may indicate a selling or shorting opportunity.

## FAQs

What does a positive change from the 200-day SMA indicate?

• A positive change signifies that the stock’s current price is above its 200-day SMA, suggesting a potential uptrend and indicating that the stock is performing better than its long-term average.

How should I interpret a sudden spike in the "Change From 200 Day SMA (%)"?

• A sudden spike could indicate a significant price movement due to recent events or market news. It's essential to research the cause of the spike and assess its implications for the stock's long-term trend before making any trading decisions.

Can the "Change From 200 Day SMA (%)" be used in conjunction with volume analysis?

• Yes, combining the "Change From 200 Day SMA (%)" with volume analysis can provide deeper insights. For example, a significant change in the percentage accompanied by high volume might reinforce the signal's strength, suggesting strong buyer or seller conviction.

# Filter Info for Change From 200 Day SMA [MA200P]

• description = Change from 200 Day SMA
• keywords = Moving Average
• units = %
• format = 1
• toplistable = 1
• parent_code =