Always trade in stocks that are in trend, and always open positions in the same direction
long term trend that occurs , 4 Stages of the stock cycle :
- Phase 1 - Abandonment Phase: consolidation (Neglect Phase)
• During stage 1, the stock price will move sideways
• Stock prices will fluctuate around the 200 day moving average (or 40
weeks), it can take months or years.
• Basing stage of this kind can take place after the stock price has fallen far on
stage 4 for several months or more.
• Generally the trading volume is small or relatively small when compared to
the volume that previously occurred at the time of decline in stage 4.
- Phase 2 - Ascension Phase: accumulation (Advancing Phase)
• The stock price is above the 150 day moving average and the 200 day moving average.
• The 150 day moving average is above the 200 day moving average.
• The 200 day moving average chart begins to climb
• The emergence of higher and higher low prices
• There are high price increases in the weekly period and are supported by surges
volume while the volume formed during pullback, is small.
• There are more price increases supported by high volumes in the period
weekly rather than decreases that occur with the same volume.
- Phase 3 - Peak Phase: distribution (Topping Phase)
• Increased volatility where stock prices move up and down within a range
wider swing. but the price pattern will look the same as stage 2, where
stock prices continue to move up.
• Generally there is a decrease in prices in large quantities with high volume.
• Stock prices may break below the 200 day moving average point.
Price volatility around the 200-day (or 40-week) moving average starts frequently
• The 200 day moving average starts to lose momentum to go up, start leveling off
and turns into a downtrend.
- Stage 4 - Declining phase: defeat (Declining Phase)
• The majority of price behavior will be below the 200 day (40 week) moving average.
• The 200 day moving average which is leveling off or starting downtrend in stage 3, now
confirmed downtrend.
• Share prices start around or reach their lowest point in 52 weeks.
• Stock price patterns are marked as lower low or lower high
• Moving averages on shorter time frames are below the moving averages
on a longer time frame.
• There is a spike in volume on falling prices with a wide range of time
daily and weekly frames and there is a small volume accompanying price increases.
• There is more price reduction on daily and weekly time frames
supported by above average volumes when compared to price increases
supported with above average volumes.
WE WANT ENTRY LEVEL 2, what are the 2 levels? USE TREND TEMPLATE
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| Trend Template Trade Like A Stock Market Wizard |
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| Trade Like A Stock Market Wizard |
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