Tag: technical analysis

Categories
Latest Posts

What are Bear Traps?

What are Bear Traps?

Understanding the Mechanics of Market Bear Traps

The term “bear trap” is often thrown around in financial circles, but what does it actually mean? A bear trap is a situation in which investors who sell short expecting a market decline are caught off guard when the market does not decline as expected, leading to a position squeeze. This article will delve into the intricacies of bear traps, how they occur, and strategies to avoid getting caught in one.

The Essence of Bear Traps

At its core, a bear trap is a false market signal that suggests a declining trend in a stock or index, prompting traders to open short positions in anticipation of making a profit from falling prices. However, instead of continuing to decline, the market reverses direction and increases, often rapidly. This unexpected turn of events can cause significant losses for short sellers.

How Bear Traps Occur

Bear traps can happen for a variety of reasons. Sometimes, they are the result of normal market fluctuations or false technical indicators that suggest a downward trend. Other times, bear traps are set intentionally by large institutional investors or market makers who manipulate stock prices to trigger short sellers’ stop-loss orders, only to then drive the prices back up.

Identifying Potential Bear Traps

To avoid falling into a bear trap, investors need to be able to identify potential traps. This involves a careful analysis of market conditions, including trading volume, price action, and news events that could affect stock prices. It’s also important to be wary of stocks or indices that have already experienced a significant decline, as they may be ripe for a reversal.

Strategies to Avoid Bear Traps

One of the best strategies to avoid bear traps is to set realistic stop-loss orders that allow for normal market volatility. Additionally, investors should diversify their portfolios to mitigate the risk of any single investment. It’s also wise to stay informed about the companies and sectors in which you invest, as well as broader market trends.

The Psychological Aspect of Bear Traps

Bear traps not only have a financial impact but also a psychological one. They can cause panic and fear among investors, leading to rash decisions and further losses. Maintaining a level head and sticking to a well-thought-out trading plan can help investors navigate these tricky situations.

The Role of Research and Patience

Thorough research and patience are key to avoiding bear traps. By taking the time to understand the market and individual securities, investors can better spot the signs of a bear trap. Patience is also crucial; sometimes, the best action is no action, especially if market signals are not clear.

Conclusion

Bear traps are a reality of the trading world, but they don’t have to be feared. With the right knowledge and strategies, investors can identify and avoid these traps, or even take advantage of them. Remember, successful investing is not just about making the right moves, but also about avoiding the wrong ones. By understanding what bear traps are and how they function, investors can protect themselves and their portfolios from unnecessary losses. 

This comprehensive look at bear traps should equip investors with the information needed to navigate the markets more effectively. Always remember, in the world of investing, knowledge is power, and caution is a virtue. Keep these principles in mind, and you’ll be better prepared to handle the challenges that come with trading in the financial markets.

Categories
Featured Latest Posts

Featured Trader of the Week: @smljoju

Congratulations to @smljoju for being the featured trader of the week! 

Sun Tzu once said that “Every battle is won or lost before it’s ever fought.” In the case of @smljoju, he believes that his trading plans curated with the help of Technical Analysis will help him win his battles. 

@smljoju has been sharing his thoughts consistently in the Investa community. @smljoju has been a member of the Investagrams community since Dec 2019 and has been very active recently. 

A couple of weeks ago, our featured trader posted his sequential technical analysis on $NIKL, a hot stock in the local market. $NIKL is recently retesting at 6-ish area and were bound for a break of trendline or a plunge from the resistance area.

As the stock recently reached bottomed at 4.88-ish (52-wk low). @smljoju charted its support, volume,  resistance, trendline, and RSI on the chart, bound for a breakout or retest in its trendline as he believes in its technical analysis. @smljoju felt an opportunity to have a good entry near the 52-wk low at 4.88ish area.

TECHNICALS OF THE TRADE

Technically, $NIKL bottomed at 4.88ish area in which it is the 52-wk low of $NIKL. Thus, the stock recently reached 6.01ish area and retesting at 6 area onwards. After breaking the resistance at the 5.65ish, NIKL volume surges along with its RSI. On the other hand, NIKL could retest in the next few weeks as the trendline will serve as resistance in the next few weeks. NIKL is showing strength in terms of volume as it continues to retest after trying to break out the trendline area. It came from a 52-wk low of 4.88ish before retesting and breaking the 5.65ish  resistance. There could be a retest in the next few weeks in NIKL whether a breakout or breakdown or consolidation. Technically speaking, the next resistance of NIKL is the 6.15 onwards to break the trendline. Furthermore, NIKL will retest whether it will surge more or be back at the bearish side or will consolidate in the next few weeks.

@smljoju was confident that this stock would retest its support and resistance. He also charted that RRHI will go up as he indicated in his TA the supports, resistances,trendline, Volume, and the RSI. He charted a good entry near the support and possible resistance. He is also observing the movement of NIKL. Further to that, he is planning his trades carefully. 

FUNDAMENTAL CATALYST

Nickel Asia is a mining company that focuses on the mining of nickel – owning and operating a total of 4 mines. As such, the stock is heavily affected by how nickel moves in the global market. After precious metals, including nickel, rallied in the commodities market, NIKL followed suit and broke out of its 20-day moving average. Furthermore, NIKL is considered to be part of the company that were bound for growth and revival of the economy. As this stock is focused on nickel mining (importing and exporting). It’s Earnings per shares (EPS) is around 0.53 as of 1Q 2022.

WHAT SHOULD BE MY NEXT MOVE

As the stock is consolidating and bound for a retest in the next few weeks, it would be wiser to observe and wait for what $NIKL might do next before jumping in. This stock is wise for growth pick  since the mining industry could be a backbone to revive the economy as per the government of the Philippines. The demand from consumers globally is continually growing. However, it’s best to wait for a consolidation, pullback, or a good entry near its support for a better risk-to-reward ratio. It would also be advisable to trade lightly and in tranches given that we’re not yet out of the woods.

Once again, KUDOS to @smljoju for being this week’s featured trader! Enjoy your 14-day InvestaPrime Access and continue to be an inspiration to the trading community.

LIFETIME LEARNING on personal finance and investing?

Yes, you can have a lifetime access to our Exclusive InvestaFest Premium Recorded Videos PLUS a Limited Edition Investor Shirt when you collect raffle tickets to join the #InvestorDay this August 8!

Earn more tickets by accomplishing tasks on the prizes tab of the Investa app. More raffle tickets, more chances of winning! 

Invest and win with the Investa app!

Categories
How to & Advice Latest Posts

Third Side of the Coin

As a self-proclaimed bounce specialist, or how my teammates like to call me, “bounzerizt,” most traders ask me, “Sir how can you be so good at picking the bottoms? What is the secret?”

To the best of my knowledge, I don’t have any. What you know about trading more times than not are the same things that I know. See, I don’t really consider too much variables before I enter a trade. When I see a signal, I execute with no questions asked. People who know me always hear me say, “execute now, ask questions later.” because that’s how I think it should be, trading without hesitation.

My philosophy is this: fundamentals don’t necessarily matter, technicals don’t necessarily matter. What matters is the crowd psychology manifested through price action.

Cliché as it may seem, but I believe that Price Action is King. Some of you may argue, “isn’t price action a part of technical analysis?” and I would respond, “I don’t think so.”

Technical Analysis for me falls under the belly of price action and not the other way around. Phrasing it this way makes it clear that price action towers over technical analysis.

I know you think that sounded weird but don’t worry, most people do. My thoughts have always been plagued by criticism and skepticism not only from beginners but also from experts in the field. The very main reason is the counter-intuitiveness and seemingly illogical ideas that I present. Most of the ideas I say contradict common knowledge yet agreeing with it at the same time. I don’t have any words, but I think this may describe it lightly—paradoxical.

Now, going back, how the heck do fundamentals and technicals seem to not matter in my eyes? Let me tell you what I think about them.

Fundamental Analysis or Fundamentals is anchored to the idea of valuations. Using balance sheets, cash flows, or whatever, fundamental analysis aims to give intrinsic value to the company. The calculated “value” of the company then gives the analysts an idea of the cheapness or expensiveness of a stock.

On the other side, we have Technical Analysis or Technicals. Technical Analysts use various mathematical indicators like RSI, Stochastics, Moving Averages, and artistic models like, Harmonics, Elliott Waves, etc. to tell whether the price will go up or down in the future.

You might ask what kind of trader am I between the two—I am neither.

See, both fundamentals and technicals suffer the same fate. They aim to PREDICT what is about to happen, they predict future prices of stocks based on their calculations. They are trapped in the future where they think price will be. They seem to be disconnected from the present moment. 

“WhAt dO yoU uSe Th3n?!”

What I have for you is a third kind of analysis that differs significantly from the two. What I propose is price action trading—understanding the psychology of the crowd.

Contrary to both Fundamentals and Technicals, Price action trading anchors to the idea that the current price is the only true price. Anything before or after that, have no significance whatsoever. The idea is to NOT think about the future price, but rather to accept that what you see is the only truth and that you have no control over what will happen next. What you only know is what it currently does. This removes the disconnect from your mind on what the price SHOULD BE and where it’s currently at.

Price action analysis deals with the collective behavior of the market participants, being in synch with the market at any instance. To not think about the future or the past. To be present in the moment. To enjoy, feel, and taste every bit of the movement. To have an intimate relationship with price. To be one with the market.

Knowing that you don’t have to know is one of the greatest discoveries I had, and it changed me forever. 

That for me is the third side of the coin. Both fundamentals and technicals have long been crowned as the only types of analyses there are. I think it’s time to honor the third side of the coin, the price action. And call for a separate study of it, divulging from its commonality with technical analysis.

Price action trading gives you insights about the behavior of the crowd behind the movement. The fear, the greed, the denial, the despair behind the price. Technical analysis just fails to do that.

To end, I would like to give you a quote that I think most of the traders reading this would need to ponder upon.

“It is not that we know too little, it is because we know too much.”

Think about it for a moment, do you really think you know too little? Or are you just learning too many at the same time?

Lessen your analysis and focus on price. Who knows what things you’ll uncover?

Contributor:

Full Name: Geyzson Kristoffer S. Homena
Investagrams username: @GeyzsonKristoffer

Channels:
Investa: bit.ly/GeyzsonKristoffer_Investa

Facebook: bit.ly/GeyzsonKristoffer_FB

YouTube: bit.ly/GeyzsonKristoffer_YT

About the Contributor:

An Applied Mathematics graduate and a full-time teacher, Geyzson Kristoffer is a part-time trader who has been an active user of Investagrams since 2017. He spends his mornings, afternoons, and evenings learning about trading and reading books: Alexander Elder’s Trading for a Living being his favorite. Cohering to his passion and profession, he set his heart on teaching and helping newbies, but only the dedicated ones.

Categories
How to & Advice Latest Posts

Unconscious Incompetence Stage: A Superhero’s Journey

This 6-episode series that I will be releasing in Investadaily will be about how we are progressing as a trader based on observations from the journey of high-level traders and by checking how they react in the social media. This is also based on the four stages of competence.

First, we will talk about the infancy stage or the Unconscious Incompetence Stage. I will be calling this as the Superman Stage. This is where most of the traders experience the beginner’s luck and the Superman Syndrome. This is not only experienced by new traders but also veteran traders who seek growth by either trading a new market or using a new strategy. Every time a trader tries something new, he/she will get back to this stage. The difference between a new trader and a veteran trader on this stage is how fast they can get out of this phase.

Common characteristics of traders on the Unconscious Incompetence stage

  • Superman Syndrome

In trading, Superman Syndrome is a highly deadly disease that will kill a trader’s port if not treated. This is where most of the traders vastly allocate their positions, leverage their port and focus on the rewards. They are on a high that they think they are invincible. Most new traders who gained from their first few trades have experienced this while others who have not, either quit or are still finding that euphoric feeling through adding more positions to their losing trades or overly sizing their positions to trending stocks without any plans.

  • Validation

The need to experience the profits and the validation to prove that what they are doing is right is what fuels them during this Unconscious Incompetence Stage. Since the experience is new, there is still doubt at the back of their mind and the only thing to create confidence is the validation from others that what they are doing is right. 

  • Highly Volatile Emotions

A trader who is extremely invested in a trading idea or, for lack of a better word, is head over heels in love with a certain stock is exposed to a very emotional ride. Traders who are constantly deliberating to every comment, group chat or any other type of social media is a big sign that they are still at the infancy stage. Even a superhero is awfully emotional when he is aware of his superpower, how much more a trader who experienced profits just by pressing that buy and sell button?

How will the Unconscious Incompetence Stage end?

Like in any movies, Superman will deal with many challenges including a face to face with Lex Luthor or worse, a comet of Kryptonite. The only to end this is when a trader experiences a big loss or a series of losses that will shatter his confidence.

Like a kryptonite spear piercing on their flesh, they will feel that burning sensation once they see their port turn from green to red. In the movies, we only see Superman win in the end but if you analyze the movie, there were a lot of Kryptonians who perished. Just like in trading, many will quit and will not survive but to win, one must also do what any Superhero did to defeat the enemy.

How to overcome the Unconscious Incompetence Stage?

If you have watched any superhero movies, most of the superheroes overcome their challenges by being humble, assessing what they did wrong and accepting that they simply do not know everything yet. Yes, NO ONE KNOWS EVERYTHING YET.

The problem of traders who are stuck on this stage is that they do not know what they do not know. This is because of Ego constantly whispering on their ear telling them that they are always right and that they already know everything about trading just because of one jackpot trade or a series of winning trades. Only by being humble and starting to understand the basic concepts of trading will traders overcome this stage.

If you are trapped on this stage, my proposal is to humble yourselves and focus on the basics. Even Superheroes need a break and learn the essentials in controlling their power. As Spiderman said, “With great power comes great responsibility”.

Contributor:

Full Name: Jan-Angel Echano
Investagrams username: @Soral

Channels:
www.investagrams.com/Profile/soral
www.facebook.com/soraltrading
www.twitter.com/SoralTrading
www.instagram.com/jan_soral/
www.anchor.fm/soral
www.youtube.com/c/SoralTrading

About the Contributor:
A passionate trader who aims to share the reality, the HOWs and the WHYs in trading. My goal is to help traders and investors like me to continuously improve and refine our skills to the path of mastery.

Categories
Latest Posts News & Features

Featured Trader of the Week: Iskidrow

As of this writing, the local index created a continuation pattern that isn’t pleasing as the price action proves otherwise. Although, the reverse will be true if the local barometer manages to breach the 7200 levels that may serve as leverage to propel its way upwards. 

Along with this, numerous names have emerged and one of which is Pilipinas Shell Petroleum Corporation or $SHLPH. Iskidrow (@iskidrow) successfully traded the stock before his analysis. This trader is an active member of the Investa community who boundlessly delivers his breakdown of local stocks with the use of Technical Analysis. 

This trader specifically highlighted the bigger picture play that recently materialized. The said stock managed to break the 19-peso structural resistance of the said underlying base that had a build-up of 9 months prior to the breakout. The said consolidation pattern was supported with below-average volume, although before its initial move, it is seen that its volume was picking up. 

The initial breakout was also supported with massive volume, along with the RSI (14) 70 breach, which indicates that the stock is currently in a parabolic state. The stock must maintain the 19 to 20-peso levels to further proclaim its stance.

Moreover, it is a low-risk, high-reward trade, as the stop loss levels for the said breakout point of the consolidation pattern is around 18.5 (-5.3%), and the take profit areas could be the structural resistance at 24 to 26-peso area (23% to 33%).

In the bigger picture, it is observed that the stock is badly beaten. For a reversal to occur, the stock must rebreak and hold its previous 52-week high levels. Else, its down move may still occur. Although note that the price targets are merely based on technicals, which means that we must be prepared whenever the stock goes against our bias. 

Congratulations to those who were able to maximize $SHLPH’s big up move. Lastly, kudos again to Iskidrow (@iskidrow) for sharing his trade analysis. Your FREE 1-Month InvestaPRO  is on its way!

Never Miss A Moment with InvestaWatcher+ Alerts! Experience it for FREE. Click on the photo to get your FREE 14-DAY ACCESS!

 

Categories
Featured How to & Advice

How to Raise A Trading Capital With or Without a Source of Income

For most people, the moment they start learning strategies and demo trade here and there, they can’t wait to put their money in their brokers ASAP.

But another question arises…

“Should I trade with the extra money?”

“I don’t have any source of income, how should I get capital?”

“Should I go all-in with my savings to trade the stock markets?” 

So, in this guide, I’ll be sharing with you different ways on how you can start (and grow) your trading business.

It doesn’t matter whether you are a student, an employee, or an already consistently profitable trader.

But first…

Let’s be clear

If you want to start a trading business because you need to pay your lifestyle, or immediately want to replace your full-time job…

Then I highly suggest you don’t, as the worst time to start a business is through desperate times.

Yes, having a business can give you exceptional rewards, but it does not guarantee you a fixed income all the time, or even a return of investment.

Which is why trading is a business that should not be approached with an employee mindset.

But if you will approach this trading business in such a way that you’re…

  • going to build a personal and financial empire, instead of trying to survive
  • acting from your vision instead of your fears
  • ready to learn the skills needed (and to pay the price) to become an exceptional trader

Then I can almost guarantee you that you will enjoy this amazing journey of a lifetime.

So let’s start…

#1: Your Most Supportive Investor 

This may not sound like a grown-up move but they can be your #1 supporter and first investor even if you don’t have any track record.

But you have to let them be aware that trading in the financial markets is not a get rich quick scheme.

So never make promises or guaranteed returns to them.

Another thing that you should do is to show them that you are going to trade the markets with a plan and not just enter and exit randomly.

Your trading plan may constantly change as a newbie, but let them know that you are not starting with “lack” as this is good for you and your “investor”

Finally…

Make sure they won’t sacrifice important payments or be in debt to give you capital.

Because IF the worst happens, you don’t want your decision to trade the markets affect your whole family.

Next…

#2: Using Your Hard-Earned Cash Properly

As an employee, it’s easy to say that you should save money and invest extra funds.

But trading is not just a side hustle or a part-time job, it is a business that requires commitment and energy.

So one thing you must do first is to…

  1. Build a safety net

You must have a 3-6 month emergency fund in case something happens, and eliminate consumer debts.

Because the last thing you ever want to do is to trade because you need to pay the hospital bills or pay your debts as it puts your mind in an environment where you will be forced to perform and expect guarantees in the market.

  1. Have a budget plan
    Always remember that a budget plan is goal-oriented.

So there’s no such thing as a fixed rule or percentage on managing your money, it is up to you!

But having it will always set your priorities straight, fulfilling responsibilities and personal goals at the same time.

As an example, you can allocate your monthly income to the following

• 25% = Needs/Expenses
• 25% = Wants/Self-Investment
• 15% = Passive investing
• 35% = Trading capital

Again, this is just an example.

So you want to ask yourself what you want and adjust the percentages accordingly.

Overall, I want you to know that what we are doing here is to put you in the right environment to trade.

Moving on…

#3: Taking Your Trading Into The Next Level 

I highly suggest that you choose this step once you have found consistency in the markets, and not when you’re just starting, but here are some sources you can consider…

1. FTMO (Paid):https://ftmo.com/en/welcome/#objectives

You must complete their challenge of profiting at least 1% and not lose more than 1% within 30 days

You can get funded up to $100,000 but this will depend on the challenge FEE you will pay

If you are someone who trades the forex markets as a momentum or day trader, then this is for you, as the challenge and time required is quite short.

2. PSYQUATION (Free): https://psyquation.com/

To qualify, you must have a PQ score above 75 with a 6-month track record on their platform.

You can receive funding up to 150,000 AUD and 20% of profit is yours, all you need to do is to use your trading capital and build a track record.

Again, if you are someone who trades the forex markets, then this is for you.

3. FUNDSEEDER (Free): https://fundseeder.com/home

It is a platform led by Jack Schwager, but conditions and funding amount is not disclosed.

You can also trade any financial markets in the world with their accredited brokers, so if you are someone who trades global markets, then this is for you.

Now…

The reason why I mentioned that you should only choose this step if you’ve already found consistency is because pursuing institutional funding or managing other people’s money with an inconsistent and self-destructing trading habit is like pouring fuel over a fire.

So if you haven’t found consistency within yourself yet, then the chances of you finding consistency with other’s money are unlikely.

Finally…

Bonus: Controlled “Tuition” Fee

If you want to start your trading journey with having “low risk” and “high reward,” then this method is for you.

Let me give you an example…

If you are dedicating a ₱100,000 trading capital to trade the markets, only put ₱20,000 (20%) on your trading account as you start trading.

Once you gain consistency in the markets and not lose everything for the first 3 months (depending on trading style)…

Place another 20% of your initial budget capital into live trading.

If you mess things up early but only put 20% of your budget into live trading, then you have experienced a learning opportunity (the reward) at a low cost

On the other hand, if you managed to allocate 100% of your capital budget, then you’ve reached the stage of consistency that’s above the majority!

Remember, confidence comes from competence and something you must prove to yourself gradually.

So…Which Option Should You Pick?

Overall, every person is unique and has different circumstances.

So, you can choose an option on how you can raise capital, and then improve on it, or tweak it in a way that’s appropriate to your situation.

With that said…

What are the other ways on how you can raise trading capital (legally)?

Let me know in the comments below.

Contributor: Jet Toyco
Investagrams Username: @Jet_Toyco
About the Contributor:

Jet Toyco is a private executive trading coach and a systematic trading portfolio fund manager at TradingwithRayner.

He is also a public helper of the trading community that is always open to questions anytime to give the knowledge people deserve at no cost, and no hype.

Categories
How to & Advice Latest Posts

Winning With Nothing But The Basics

Before entering the level 10 in a game, the player needs to start at level 1. Before even the famous Shakey’s or Mang Inasal have started, they have started small too! And just like any other investor or trader, everyone starts with the foundation of the basics in technical and fundamental analysis.

Winning in the stock market is a process. It is never just a one-step win or even a trade with 80,000 pesos gain. Everything starts with a good foundation of financial literacy, and this starts with the basics in technical and fundamental analysis.

Now, what’s in it for you to understand the basics? Understanding each concept of technical and fundamental analysis will help you assess the stock you are about to pick. It helps you gain more wisdom on how you should understand the stock market and the company on various perspective, just like how you would choose between wearing a casual or formal attire. Analysis provides information that will help you interpret the structure of the company or even understanding the figures on the financial statements.

As an investor, you must know the intrinsic and true value of a stock. You must be able to determine if the value reflects on the stock prices. Of course, who would like to buy a 500 pesos worth of ground coffee without knowing its history, background, and components! This is the reason that you should invest in knowledge on analyzing the stock market.

Fundamental Analysis

Fundamental analysis is not just defined to be any fundamental, basic, or elementary education. Understanding the component of fundamental analysis would help you asses the quality, profitability, sustainability, and growth of the company.

Start from a top-down approach, in which you would start analyzing information from general to specific. Now, how are you supposed to win the basics in fundamental analysis? Remember the acronym FLIGHT! And now we are boarding to our destination, the fundamental analysis

F stands for Financial as your Language

English and Tagalog are not enough in understanding the stock market. Make finance as your language.

Why? So that you can understand the financial characteristics and financial statements of the company you are about to invest into. Now, making finance as your language does not solely mean accounting or computing. It also helps you understand underlying factors and signals such the news and press releases of the company. Assess the valuation, earnings, and growth, of the company to know the financial health in terms of assets, obligation, ratios, and cash flows.

L stands for the Law of Demand and Supply

Math? Stock Market? And now Economics? Yes! You see, if there are sellers and buyers, there is a demand and supply in the market, and this makes the stock prices rise and fall. Take note that when the stock goes uptrend, there are many buyers. Otherwise, there are many sellers.

I stands for Intrinsic Value 

Always keep it in mind that you would want to buy a stock which reflects its value on the stock price. To know this, you must check the Price-Earnings ratio of the company and compare it among its peers or company of the same industry.

G stands for Growth and Good Investment

The relationship of the price and value also leads to quality of growth and goodness of the investments. In order to know the quality of the company, you must check on the high-quality rate of the company’s value on the financial statements (balance sheet, income statement, cash flow) and financial ratios (liquidity, operating, valuation, common size, solvency).

Never just check on one part of the structure! You must check the signals and be able to determine if the company is under too much debt or is it well operating on its finances.

H stands for Historical Performance

It is a must to check on the historical performance of the company to check whether or not they are growing. Ask yourself if it is the company you are willing to place your money into for a certain period.

T stands for Think not Trend

Never invest on a stock just because it goes trending or your friends tells you so. Think wisely and analyze the company’s stability and development. Remember being famous or big does not necessarily mean it is good investment.

And now we are unto our next destination, technical analysis. Now, let’s READ!

Technical Analysis

R stands for Reading Charts, Lines, and Patterns: Market Structure

Understanding the different charts, trend lines, and candlestick patterns will help you understand the market structure. With these visual representations, you can slowly begin to determine if the stocks are going uptrend, downtrend, reversal, or sideways.

E stands for Evaluation with Indicators

Now, in technical analysis there are various indicators. However, you must begin with learning the concepts then applying each and checking which one would fit your strategy as a scalper, day trader, position, or swing trader.

You must first understand the concept of floor price and the floor ceiling, also know as the support and resistance. Why? Because this will help you understand the breakouts and breakdown with the candlesticks,

You can also use the RSI, to know if the stocks is overbought or oversold, or the moving average to know the buy signal. There are various purposes of indicators. But most importantly, this will help you enter and exit the market on a great time.

A stands for Assessing yourself 

Assessing chart movements is useless if you do not have risk management and control over your emotions. As Alexander Elder quoted, “the markets are unforgiving, and emotional trading always results in losses”, and I guess you wouldn’t want that either!

D stands for Don’t forget to read and do a strategic application

After all these points to remember, always enjoy learning and re-learning over and over again.

Charlie Munger: The game of life is the game of everlasting learning. At least it is if you want to win.

CLICK ON THE PHOTO TO GET YOUR INVESTAPRIME ELITE FREE 14-DAY ACCESS!

Subscribe to our Newsletter

Join our mailing list for investing tips and stock market advice
to help you reach your first million.

You have Successfully Subscribed!