Intraday Stock Trading Strategy Using The 1-2-3 Reversal Pattern

December 21st, 2010

Whenever traders discuss about topics on stock  reversal strategies, most of the time the 1-2-3 reversal pattern would be brought into the discussion ( without fail ) too.

This is so because the 1-2-3 reversal pattern is one most commonly used where technical analysis is concerned.

( whether stock, forex, gold, commodity, silver, oil….it is applicable anytime )

The main attraction about this 1-2-3 reversal pattern is that it is very easy to spot in the market.

Traders do not need any special technical indicators at all but merely using their naked eyes to capture the required points forming ….that’s all.

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Here’s an illustration of a Bullish 1-2-3 Reversal Pattern to share with You :

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1-2-3 Bullish Reversal Stock Strategy

Take a look at the illustration above, do You think is it simple to spot this 1-2-3 reversal pattern in the stock market ?

I am sure by looking at ” this illustration “, it indeed looks easy and simple to spot right ?

If You think that is it simple ( and doesn’t require much effort at all ) to spot for such 1-2-3 pattern..

Then I am sure the other 1,235,000 traders out there would think likewise too.

YES….! ….Indeed on a ” perfect illustration ” like one above, it looks very easy to spot definitely.

The main challenge comes when traders try to spot for it in the LIVE trading environment.

When he/she takes a look at the chart of the stock counter they wish to trade ….

AND try to spot for a ” Perfect ” 1-2-3 reversal pattern…

They would only get even MORE Confused after looking at the live chart.

Why so ?

Because in the LIVE trading market, such 1-2-3 reversal pattern formation is NOT so ” perfectly looking ” at all.

Sometimes the pull-back  ( point 2 ) doesn’t look like one at all….

OR Worst :

…..Sometimes the entire 1-2-3 reversal pattern formation is NOT even presents in the market..

BUT ironically, traders like to ASSUME that they have indeed spotted one and just simply jump in and place their orders.

This is what I called ” False Assumption “ on the traders’ part and it can lead to very SERIOUS problem later on.

…..because they assume that such a simple 1-2-3 pattern would always present in the market ” as and when ” they are looking for one !

Hmmm………with that kind of trading mindset, it would only lead to even MORE Frustration and even MORE  LOSING Trades in the process.

That is why it is not new to hear that although traders are using such simple 1-2-3 reversal pattern..

BUT they are losing miserably week after week…..month after month  in their tradings..

=> Just because they thought that since all the websites / stock trading books are teaching  such simple 1-2-3 reversal pattern ….in such a simple way.

Then what they need to do is to BUY when the price broke the previous resistance…( for a bullish 1-2-3 reversal pattern )

OR……they just need to SELL when the price broke the previous support ….( for a bearish 1-2-3 reversal pattern )

Well……that’s the common way most traders trade this pattern I know..

But not for me actually.

Why so ?

….Obviously because IF I also trade this 1-2-3 pattern like what most textbooks / websites taught…

Then my winning percentage would NOT be as high as I want it. ( as observed so far personally )

Why would I want to follow a stock trading strategy or reversal pattern that CANNOT provide me with high probability of winning …..right ?

If  You have been relying on such 1-2-3 reversal patterns just like how most textbooks/ websites teach….

AND You’re actually NOT getting the results / profits ) You want …..( although it is suppose to be so simple & profitable.)

Then You definitely can relate to what I told You in a much clearer view.

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( QUESTION ) :  Alright Bruce, since You DO NOT follow the conventional way of trading such 1-2-3 reversal pattern, ” How ” do You trade it then ?

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Is this question also appearing on Your mind currently too ?

If  so….continue reading below as I explain everything to You in a much clearer view to help You understand more.

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First, let me show You how traders normally use both the Bullish & Bearish 1-2-3- Reversal Pattern :

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( Bullish 1-2-3 Reversal Pattern )

1-2-3 Bullish Reversal Stock Strategy

For the Bullish 1-2-3 Reversal Pattern, here’s how traders use it :

1)  Price has to climb previously from Point 1

2)  At some point, the price start to Pull-Back forming Point 2

3)  Once the pull-back completed, the price would start to resume up-trend again forming Point 3.

4)  In the event the price broke the previous resistance ( Point 2 ), then traders would use that as confirmation to BUY

That’s about it. Nothing more complicated than that.

However, as You might already also know that such pattern are merely pattern after all.

It Does NOT Guarantee 100% winning success.

In any trading game, it is solely the trader” s ( our ) responsibility that we take charge of our own trading decision.

Whether it is a winning trade or losing one….it is directly link to our decision making.

When we lose, we cannot blame others as nobody force us to enter into the trade in anyway.

( unless You’re being force to….then it’s different story ! * laughing * )

Since this pattern doesn’t guarantee that I can win most of the time…

Then of course I must make it an effort to spot for ” conditions “ that would lead to a more reliable 1-2-3 reversal pattern set-up right ?

Yes….that would be coming up later after I talk about the Bearish 1-2-3  reversal pattern.

Read on for now.

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( Bearish 1-2-3 Reversal Pattern )

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1-2-3 Bearish Reversal Stock Trading Strategy

The Bearish 1-2-3 Reversal Pattern is just the opposite of the Bullish counterpart.

Here’s how traders look for confirmation :

1)   Firstly, price has to trend downward after the peak at Point 1

2)  Price will hit a point when it starts to pull-back forming Point 2

3)  Once the pull-back completed, price would resume the downtrend and the turning point is Point 3.

4)  In the event the price broke the previous low ( Point 2 ), then a SELL confirmation is present.

However, like what I mentioned above during the 1-2-3 bullish reversal explanation….

I said that purely relying on this confirmation alone, the winning rate is NOT high at all.

In fact, many traders are only struggling and keep on losing when they use this 1-2-3 reversal pattern solely.

Since my main intention of setting up this blog is to share profitable stock trading strategies with You guys…

Then of course I am not going to leave You in the lurch here and let You ponder.

Whenever I talk about a problem that made most traders struggle with their tradings..

I will definitely provide You guys with a proven solution or trading strategies to help overcome that problem too.

And I will try to make it as easy and simple to understand as possible for You guys ya. * smile *

So shall we proceed now ?

Let’s go.

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How To Improve The Winning Probability When Using The 1-2-3 Reversal Pattern ?

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You see….whenever we  look for a reversal pattern in the stock market..

Technically, we are also looking for a ” Turning Point ” of the market right ?

And merely by keeping this important point in mind, we just have to look for such 1-2-3 Reversal Pattern that formed around the turning point.

=>  ” BUT……do we just include ANY turning points we spotted in the market then….. Bruce ? “

NO ! …..of course NOT !

We are going to include ONLY Those Turning Points where the price would move a Significant distance.

This is critical because if  we only look for turning point where price is more likely to move a further distance..

It also means there are more profits for You & Me to grab ……right ?

And let’s presume that if the realistic profit target is about $1.00

We are merely aiming for $0.25 out of it…

Is it conservative enough ?

Is it realistic enough ?

Most importantly, is it much easy for such profit target to be hit as compared to aiming for MAX ?

I am sure the answer is very obvious and I do not have to say it out right  ! * smile *

But I just say it out anyway : ….Yes….Indeed easy of course.

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These are the succeeding key elements that governs the trading strategy I am sharing below actually.

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1)  A turning point that is more reliable

2) A turning point whereby the price would move quite a significant distance due to the ” money flow ” factor

3) A turning point where all the big players and institutions are most likely ” agreeing ” with you too !

So what are these ” Turning Points ” that literally satisfy all the 3 criteria above then ?

( PS: What’s coming below is going to be IMPORTANT, so please read every words and understand the objective thoroughly ! )

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There are 2 such Important ” Turning Points ” that often occur in the market actually.

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1)   First one is when the market is in EXTREME Overbought/ Oversold

2)   Second one is when the price in the market hit a really STRONG Support/Resistance

Continue reading below as I explain everything You need to know with illustrations !

For a start, let me talk about the scanning for the 1-2-3 reversal in the EXTREME Oversold condition then.

( because if You do not have a margin account , You cannot SHORT SELL any stock counter )

So it would be better if I talk about things MOST traders can do and JOIN in the fun…! * smile *

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Spotting 1-2-3 Reversal in the EXTREME Oversold Condition

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To help You understand more on this 1-2-3 reversal on EXTREME Oversold condition, I will be using one of my actual trade on the PDL BioPharma Inc stock ( PDLI )

I have a few good ways to find hot stocks that are trending at any given time.

And one such technique I use to find hot ” trending ” stocks is to use the MSN money.

Yes, besides being FREE, MSN money also provide very good resources for doing stocks research that I like.

( NOTE : I will be writing an article sharing how I use FREE resources online to find hot & profitable stocks to trade soon. Not in this article though as the main focus is to explain more on this 1-2-3 reversal pattern. Do check back often or You can sign up for my free stock trading newsletters to receive my latest and updated stock tips. )

Let’s continue…

When I spotted this counter ( PDLI ) around the 2nd week of  AUG 2010.

The scout counter is showing a ” 8 ” ratings for this stock.

( Anything more than a ” 7 “, it is good enough to take a look into and find good trading opportunities. )

With a rating of 8, of course I would want to explore more to see if I can spot any good trading set-ups to make some profits for myself. * smile *

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Here’s an illustration of the Set-Up I spotted to share :

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1-2-3 Bullish Reversal Stock Strategy

Wow….so many arrows in the illustration above right ….? * laugh *

Never-mind, allow me to explain to You step-by -step below :

1)  This stock has been Trending Up-Ward previously.

( NOT surprising as Msn money is giving it a rating of ” 8 ” and it is also fundamentally good )

2)  It hits a peak whereby the buyers decide to take profits and resulting in the BIG Plunge.

3)  This stock then hit an Over-Sold condition (  RSI proved it ).

- Which also means the price is super discounted now so most likely BIG PLayers are placing their BUY orders again soon !

4)  Indeed, the price climbed from that over-sold condition and actually form a 1-2-3 ( bullish ) Reversal Pattern too.

….Please refer to the above illustration again if You need to understand these 4 scenarios.

So the next step for me to consider is ” What Price ” should I enter my BUY order after recognizing this 1-2-3 reversal pattern ?

Simple !

- Just place a slightly higher price than the previous high ( at point 2 )

Since the previous high is at about the price of $5.45

Then obviously I would need to place a ” pending BUY ” at a slightly higher price.

Making use of the natural ” market flow ” to allow the price to hit the level I want is truly the most proven way to capture the bullish momentum.

I decide that I want to place it at $5.52.

( which I managed to get filled about 2.5 days later )

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Trade Details :

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Pending Buy at :  $5.52

Stop- Loss at :  $5.35   ( $0.17 risk )

Profit Target at :  $5.80  ( $0.28 rewards )

Giving me a 1.6x reward/risk ratio.

Good enough for a short-term ( intra-day ) position.

But then …..why do I set my Profit Target at $5.80 then ?

Why not higher ?

Here’s why :

1-2-3 stock reversal trading strategy

From the illustration above, You can also see that there is a Support Level at around the price of $5.82.

This is one support level that CANNOT be taken lightly as the price might climb to this level and then retrace or even reverse !

So I am aiming for a price slightly below that level at $5.80 is definitely a ” wise ” thing to do.

( Remember this : Being conservative & realistic about Profit Target is anytime better than aiming for UNREALISTIC profit targets! )

So how did this trade progress ?

This is the result :

1-2-3 Reversal Stock Strategy

Yea, after about a week later, the price target of $5.80 was hit for a nice profit of $0.28/ unit.

So if You also pump in 10 lots like I do, that would be about $2,765+  ( after comms deduction )

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Here’s the earnings screen-shot for this trade to share :

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Alright up till this point, I have gone through the stock strategy for the 1-2-3 ( Bullish ) reversal pattern trading.

As for the Bearish version, it is just the opposite of this Bullish version I just shared though.

So I would not cite an example for the bearish one then.

Instead, I will be explaining on another market condition which is very useful for spotting this 1-2-3 Reversal Pattern.

And with this market condition, all the BIG Players,  BIG Institutions & Major Banks would be watching too.

It is none other than the Resistance/ Support in the market.

Well…NOT any resistance/support though…..

BUT…..we are ONLY looking for a ” Strong ” one that has a really HIGH Probability of holding…

So that we can spot for a potential 1-2-3 reversal pattern following that.

Let me show You one example which I traded recently below.

I uses this exact strategy combining a STRONG Support + the 1-2-3 ( bullish ) Reversal Pattern on a trade I profited around the Sept period.

It is a stock counter called ShoreTel Inc ( SHOR )

- Which is a small-cap public utilities company.

And it is given the rating of ” 7 “ at that period on MSN money.

A ” 7 ” rating is a rather good time to enter into a bullish stock actually as it is normally the commencement of the BULLISH RUN !

( more on that in another post ya….for now let me continue with the 1-2-3 reversal strategy )

When I am screening the basket of stock I shortlisted for monitoring….

I actually spotted this particular SHOR stock already has a very ” Strong Support ” holding at the Price of $4.40.

And the good thing is that the 1-2-3 ( bullish ) reversal pattern is appearing in the chart now.

So I just have to decide on a pending ( BUY ) order to allow the trade to progress naturally.

Here are the  few Set-Ups I saw around the beginning of SEPT for this counter  :

1-2-3 reversal stock trading strategy

From the illustration above, there are indeed a few ( important ) clues that can confidently tell me that this is indeed a good opportunity to BUY.

Can You figure these important ” clues ” out too Yourself ?

If You can’t……then just read on as I provide You with all the answers. * smile *

And these IMPORTANT ” Clues ” are :

1)  The Price actually formed a VERY STRONG ” Support ” at the $4.40 region.

( The TRIPLE Bottoms are so ” Obvious ” too ….right ! )

2)  Price then start to climb again forming Point 1

3)  It hit a point and start to retrace which forms Point 2

4)  Shortly after, the up-trend resume again and that turning Point is #3

So having spotted all these ” Congruence ” elements, I know it’s time for me to grab some profits out of the bullish move coming.

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I place my Pending ” BUY ” Order at around $5.05

Stop – Loss set around $4.85   ( $0.20 risk )

And aiming a Profit Target at $5.40   ( $0.35 rewards )

This would give me a 1.75x  reward/risk ratio.

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Good enough for a intra- day trade.

But why am I aiming Profit Target at $5.40 ?

Are You also wondering too ?

Let me show You why here :

1-2-3 stock reversal trading strategy

As You can also see from the illustration above.

I can actually aim $5.60  ( first line ) as the profit target though as that is the previous high.

( In fact, I can go even higher to $5.80 as the price went high previously actually )

BUT….!!!!   I am only aiming for $5.40 instead.

And do You know why I am aiming for such a much lower profit target then ?

For a measly $0.35 gain from my triggering price ( $5.05 )….

Not hard to guess my reason right I am sure.

Yes….I am being conservative and ” slightly more ” realistic here.

This is a intra-day trade meaning I am NOT holding it for long term.

It is just a hit and run kind of trading style.

Remember, I am a trader and my main objective is to grab small little profits ” fast ” and then keep repeating again….and again.

So when You combined all these ” IMPORTANT ” elements :

1)  A price level where all the BIG PLAYERS & MAJOR Banks are watching   ( Strong Support that is…)

2)  As well as the 1-2-3 Reversal Pattern present in the market right after the formation of  3 TRIPLE BOTTOMS…

3)  And You are only aiming for ” Conservative & Realistic ” fast profits …

( Yet giving You a good Reward/Risk ratio ….)

What would be the end results most likely ?

Tell me………* smile *

Yes……a ( really ) High Winning Probability Set-up that is !

And when You can also trade with such confidence each time on Your own…

Winning each and every month is NO longer a problem then…..trust me.

( I have been there …..done that ! )

That’s why I decide to start a blog sharing all the Profitable ( yet simple ) Stock Trading Strategies to share with the world. * smile *

Now back to the trade……

How did the trade turn out then ?

Did my Take-Profit target got hit ?

Or ( unfortunately ) it is the Stop – Loss being hit ?

Here’s the results :

1-2-3 reversal stock strategy

After about 2 weeks + of  holding this counter, the Profit Target was hit at $5.40

Giving me a nice profit of about $3,500 trading 10 lots.  ( before comms deduction )

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Here’s the earnings screen-shot for this position to share :

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And You know what happened to this counter after I exited at the Price of $5.40 ?

Check it out :

1-2-3 bullish reversal pattern trading

Yes manz…!

The price actually climbed ALL THE WAY up to the $7.00 level.

BUT, before that it actually retrace abit first – Which is shortly after I exited at $5.40

Now You know why my stock trading strategies are MAINLY formulated for intra-day trading.

Grabbing quick and fast ” small ” profits – Sneak in and out of the market secretly like a Ninja! * smile *

Oh ya….do You remember that earlier on I told You that this SHOR counter has been given a rating of ” 7 ” on MSN money….?

I also said that any counter with a rating of ” 7 “…..the possibility of it Breaking- out and forming a TREND is very high too…….remember this ?

And that is what happened to this counter now guys !

Climbing to the $7.00 mark after a retracement at the $5.40 region.

If You are already confident in such intra-day trend riding strategy…

You can jolly well re-enter again after the ” 2nd ” 1-2-3 reversal pattern completed though.

As long as You can also spot the ” Strong Support, Rating Required & The Essential ” Congruence ” Elements  Needed “..

It is indeed very powerful if You can spot for as many ” congruence ” elements as possible for a certain stock counter.

And then combined with all these ” natural market flow + Price Actions ” for Your analysis..

Your trading accuracy could be supercharge to a whole new level too…..no joke !

I have proven to You in my many of my trading examples. ( earnings proof too )

So if You’re NOT at this level of confidence yet after reading the stock trading strategies I shared in my blog.

Just DON”T give up too early…

Give Yourself more time……trade using only the Simple Yet Proven stock trading strategies which You can find on my blog here.

Practice them until You’re happy with the results.

Never give up….and soon You will also achieve the success You want….I am sure ! * smile *

And the beauty is that once You can train Your naked eyes to spot for all these set-ups and congruence You need…

Combined with fundamentally sound / hot stocks in the market…

These kind researches would not take You NO more than 15 – 30 minutes normally.

The key is to be patience and wait for the ” Profit Zone ” to come to You.

Meaning wait for the profitable set-up to show itself in the market ..

And then all You have to do is jump in….place Your order….and that’s it.

You would be trading with confident too by then ( just like I do now ) because You know whatever You see – Are mostly what the BIG PLAYERS & Major Banks see too !

Thanks for reading this far.

Remember to practice this 1-2-3 reversal stock trading strategy as soon as possible ya !

Posted in 1-2-3 Reversal Pattern Stock Trading, Stock Trading Strategies | 171 Comments »

Trend Reversal Stock Trading Strategy- Predicting Turning Point Using MACD & Simple Price Actions

December 17th, 2010

In this post, I will be sharing on a stock trading strategy which makes use of the MACD  ( pronounced as Mac – Dee ) indicator to find turning point in the stock market.

If  You have been reading the other articles I wrote in my stock trading strategies blog….

Then You would have known by now – That I do not rely solely on any technical indicator for my trades …….never.

But rather, I would combined it with the more reliable Price Actions that exist in the stock market for my entire decision making.

Hence, it would be obviously natural that for this strategy combining the MACD, I will be combining it with Price Actions as well.

Seriously, this is indeed a very reliable and highly effective stock trading strategy to predict ” Turning Point ” in the stock market in advance.

(….especially after a very huge PLUNGE ! )

Read on to learn the full strategy below.

When I ask any traders…..( whether traders from stock or forex or commodity market  ) this question :

“….Is it good if  You can predict the turning point in the market way before it happens ? “

100% of the time, these traders would say a big ” Yes “ definitely.

That’s because it is not new to know that a ” turning point ” is also equate to – A  Low Risk & High Reward trading opportunity.

If there is one holy grail system that traders would want to learn…

Then I am pretty sure it would be to know :

- ” How To Predict Turning Point In The Market Way In Advance…..! “

And in this strategy combining the MACD + Price Actions in the market….

…I am going to show You how I capture turning point with very high accuracy.

Before I go into the exact trade of mine where I deploy this exact strategy.

I would want to share a little more about how this MACD indicator works first.

Knowing how a particular technical indicator works is indeed very importance for one’s trading success in fact.

Well…….I am NOT saying that You should go & learn about the mathematical or complex algorithms that govern the particular technical indicator thoroughly though.

But rather, at least it would be good if You learn – ” what is the main objective of this indicator You’re using ”

Most traders simply ignore to at least understand the main objective ….

…..and what they do is just drag and drop as many such technical indicators as possible onto their trading charts..

And hope that including as many such technical indicators as possible, they could get a ” holy trading signals ” that would build them a fortune in no time.

A terrible yet common mistake 90% of most traders committed in fact.

Hmmmm…….that is just an utterly nonsense way to trade the stock market I think.

Because 9/10 times, the end results are only disappointments & big time frustrations.

They are relying on too many different indicators and getting too many confusing & FALSE signals.

That’s why !

For myself, before I would even rely on any technical indicator for my trade…

I would at least try to educate myself and understand these 2 aspects :

1)  What is the strength/ weakness of this indicator

2)  What does it measures ( whether momentum or average prices…or….etc )

Knowing these 2 aspects are very essential to reap the full benefit from the technical indicator….. I must say.

Besides building Your trading confidence while relying on them…… it also helps You Avoid jumping into the  ” less reliable ” signals it generate.

Alright….so how does this MACD works then ?

( Most importantly…how am I going to explain to You without being too technical ? * grin * )

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MACD Basically Measures Momentum Change In The Market

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Yes, the MACD indicator basically measures momentum change in the market.

However, DO NOT mistaken that momentum change is the same as price change though.

Many traders who don’t bother to understand the main objective of the particular indicator they’re using would commit this terrible mistake definitely.

….Especially newbie traders mainly as they are just starting out and still in the ” confused and blue ” state.

“  So Bruce….when momentum in the market changed, it does not mean the price would change as well ? “

( My Answer ) :    NO…..You should never expect the Price to reverse once Momentum reversed…….Remember this!

However, whenever we spotted a momentum change in the market, we can ( at the same time ) anticipate a Price change coming soon.

It is just like an advance warning for us.

So that we can get ready to take up positions anytime when the various elements of  ” congruence ” exists in the  stock market.

Let me give You an example of this momentum change that we always encounter in our daily life..

If You’re in a car ( whether driving or as a passenger ), and when You see a car in front of You slowing down…

What does that mean ?

Obviously it shows that there is a ” high probability ” that that car will stop anytime soon right ?

That’s exactly the simple theory that applies to the stock market momentum changed.

Just that before we jump in to trade, we need to see more other ” hints ” present first.

( I will talk about that in details later below ….read on )

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MACD Signals You Need To See For A Price Reversal

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Remember what I mentioned previously that :

- Momentum Change Would Soon Lead To Price ( Direction ) Change…

If You are also one such trader whom also want to know -  ” When will the market turn up ? “…

Then learn to read this signals from the MACD  as – It would do You alot of good and make Your pocket more FAT as well from Your future trades…* grin *

Obviously, before the market would turn up, it MUST be a down-trend previously…

Then next, we would want to spot a ( Bullish ) MACD Divergence like this :

1)   Price was trending down in the market previously

2)  Price either make a LOWER LOW…..

OR….Same Low as previous low  ( such as a double bottom )

3)  At the same point, MACD actually made a ” higher low “…

OR…..same low as previous low.

Means totally OPPOSITE when compared MACD and the Price in the market.

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Here’s an illustration of a Bullish Divergence to help You understand more :

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MACD Bullish Divergence Stock Trading Strategies

A Bullish Divergence is when You anticipate a price  to Turn Up after a down trend..

Whereas for a Bearish Divergence, the price is hitting a PEAK and we can anticipate a Turning Down.

The set-up would be opposite of a Bullish Divergence I just talked about above.

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One Essential Secrets You Must Know When Using MACD Divergence

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Do bear in mind that when You spotted a divergence on the MACD….( regardless of bullish or bearish divergence )

Please Do Not jump in straight away thinking that the price would turn though…

The secret to achieving high winning rate with such MACD divergence stock trading strategy is to get confirmation from the price action itself.

It means the Price Action in the market must show some ” hints ” of a Bullish Reversal too.

Then it would be wise to jump in for a BUY trade.

Before any BULLISH Price Action is spotted  ( such as a double bottom or pin-bar ….etc )…..it’s better to step aside till they shown up in the stock market.

Likewise for a Bearish Divergence, price action in the market must show signs of a reversal too before You jump in for a SELL trade.

I would consider spotting a reversal in the stock market using MACD divergence – One of the simplest strategy one can use.

And yet very reliable and profitable most of the time ….( once You’re more confident in spotting a good divergence )

If this is the first time You’re seeing this stock trading strategy on divergence, it is perfectly alright to be confused. * grin *

Once You start practicing by spotting them on the charts, You will get better over time too.

That’s how I master this exact same divergence strategy over time during my learning journey.

The more I trade…the better I get over the years…

The key is never give up if You did not succeed on Your fist few attempts..

Just keep trying….and You will achieve it too…..proven!

Alright, next let me share a live trade of mine where I deploy this exact same strategy and spot a good bullish divergence in the stock market for You.

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A Live Trade On Bullish Divergence Trade For You To Understand More

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There are a few stock counters which I deploy this divergence strategy actually.

For this illustration, I will use the one I traded on the Citigroup Inc ( C ).

This Citigroup counter has been trending down very aggressively before 2010 actually.

And when I spotted it around the 1st week of Feb 2010, the Bullish Divergence on the MACD is already showing.

Like This :

Reversal Stock Trading Strategy Using MACD

As You can also see from the screen-shot above..

The price in the market has stalled at the $3.15 level and formed a strong support.

In order words, the few LOWs are all the same.

Remember the 2 criteria we need to see for a bullish divergence ?

1)  Either Same Lows on the price & ” Higher Lows ” on the MACD

2)  Or……Lower Lows on the price & ” Higher Lows ” on the MACD

So it means point #1 ( SAME LOWs on price ) has been shown in the market.

But when You look at the MACD signals, we are actually getting a ” Higher Low ” formed.

( with the blue MA crossing the red one again implying a BULLISH Reversal coming )

With this set-up, it is already good enough for me to anticipate a BULLISH Reversal for this counter.

However, like I mentioned earlier at the start of the post…

I need further confirmation from the Price Action before I commit into a BUY trade.

Hence, I wait further until….

I See This In The Market :

Reversal Stock Trading Strategy Using MACD

Having waited for about 1 week, I spotted the Bullish Candle closed & with that….

I know it’s time !

I manage to secure a BUY order at around the price of $3.31

With my pre-determine Stop Loss level at the price $3.10  ( $0.21 risk )

As this is a very strong BULLISH Divergence based on these facts in the market :

1)  3 Same Lows ( or triple bottom )

2)  Price failed to breakthrough the support at  around $3.31

3)  This stock counter has been Trending DOWN aggressively before

With these 3 considerations, I would definitely aim for a rather good returns.

Here’s how I set my Take Profit levels :

( nothing complicated at all…. but just using old & proven method of  ” money flow ” in the market ! ….Resistance Levels that is )

Look at the illustrations below to understand more

Bullish Divergence Stock Trading Strategies

For this trade, I am merely using the subsequent resistance points as the Take – Profit Targets.

Resistance points directly reflect the point where Sellers are willing to sell further..

…and also show that Buyers are NOT willing to bid higher.

It’s that simple and that is governed by the ” money flow ” factor in the financial market.

Don’t need any complicated formulas or algorithms to figure out realistic Take Profit Targets actually.

Just the plain old , traditional & proven method of using resistance/ support…….that’s all.

It works…..and it would work forever down the road !

So for this trade, the first Profit Target is set at about $ 3.60

#2 Profit Target set at about $4.00

Notice that I chose profit targets which are ” round numbers ” too.

That’s because it is not new to know that some big players with really deep pocket merely remember the price that ended with ” round number “.

I am just being more conservative here…..but all these little considerations would literally lead to a high winning probability for my trades..

That’s why I can trade on a full time basis ( earning a very good 5 figures income each month )  for almost 7 years now….* grin *

With the 1st TP at $3.60

2nd TP at $4.00

These 2 targets as compared to the risk ( $0.21 ) that I am taking, I am still getting a good risk/reward ratio of more than 1.

And of course MORE for my 2nd TP point.

So how did the trade develop then ?

Here’s the answer for You :

Stock Trading Strategies On Bullish Divergence

As You can see from the screen-shot above too.

The first Profit Target was hit at price $3.60  ( after about 3 weeks  )

2nd Profit Target was hit at price $4.00 ( shortly after 1st target was hit )

And if You notice on the MACD signals after the my 2nd Profit Target was hit…

The 2 MAs have actually crossed to the upside into the positive zone..

Which signifies a gain of the Upside Momentum in a ” strong way “.

For traders who are into long term positions trading or investing..

These is one good set-up for them.

For myself, my stock portfolio consist of counters which are  for short term trading as well as long term investment.

And in this blog, I will be mainly sharing on my short term stock trading strategies to fellow readers.

But why short term stock trading strategies Bruce….. ?

That’s because only with short term trading, one can realistically ” compound ” his/her account into a much bigger one.

I believe most people would not start with a $50k account or even $100k account size if they are still newbies.

Most would ” wisely ” choose to start with $2k, $5 or at most $10k as trading capital.

So aim with a few proven short term stock trading strategies, they can trade more often…..

……and then keep increasing the lots size after each successful trading months to let the power of ” Compounding ” take effect.

In this way, when the account grows bigger progressively, his/ her trading confidence would increase at the same rate too….if not more.

It is definitely more scary to start trading with a $50k account ….or even $100k account.

Than to just start with a $5k account……agree ?

Simple logic here….with a $5 account, that’s the max You would lose..

But with a 50k or 100k account….it is a different story !

In any form of trading, we do not want emotions ( fear & greed ) to affect us at all..

Because emotions would make us trade illogically and result in bad decision making….or even impulse.

So minimizing emotions during trading is very critical for one’s success.

And starting with money that You can afford to lose is one of the best way to minimize emotions in trading.

Unless $50k or $100 is Nothing to that person….then of course it’s another story.

But one thing for sure, as long as he/she is a human being….

They would not like the idea of  ” Losing “……!

Which would then lead to trading on impulse or gambling with the market using even larger of cash in order to fight back….

That would be a commencement of the well – known vicious cycle that kill most traders.

So much for the emotions thingy in trading..

Do You think this stock trading strategy on Bullish Divergence is reliable and profitable at this point ?

I certainly think so !

Proven, Reliable and Profitable that is..

And the best thing is that You can use this strategy to predict ” trend reversal ” in almost any time frames You want as well.

Of course, just make sure You are aware of the time frames You’re looking at then.

Bigger time frame, You would be looking at a much bigger price projection in the stock market.

Smaller time frame, that would be a smaller price projection so it would not be wise to aim for too high a profit target I am sure.

Just make sure You adjust Your targets accordingly with different time frames.

What about ” Profitable or not “….. ?

Just as the old saying goes :  A picture pains a thousands words right ….?

———————————————————————————————————-

Here’s the earnings proof  to share :

( 1st Take Profit : )

( 2nd Take Profit : )


Perhaps till now, You’re still in the confused mood and cannot believe that winning in the stock market is actually so simple in fact.

Yes…..trading is hard if You’re still not confidence with what You see in the market.

Because that would affect Your trading decisions.

( buy/sell, entry, stop-loss & profit targets , emotions…everything )

But the moment You know that this is the ” natural behavior ” of the financial market……

….AND You’re basically following the natural Market Flow – Seeing what the big players SEE…

Combined with the mindset that as long as You’re consistent with Your risk/ratio and trading rules..

You will have a high probability of ending in the profit zone each month.

Can You also do all that ?

For You guys out there who are still struggling with Your stock trading , try to tell Yourself this :

“…..Trading is actually very simple, the simple the stock trading strategies I am using, the easier I will make the profits I want end of the day ! ” * grin *

Trust me that when You can say this and fully live by it for as long as You’re trading the stock market ….( or other financial market )..

You will sail smoothly through each month as well…

Even if You met with a lot of challenges and obstacles along the way, never give up no matter what and strive to overcome them.

( Of course I DON”T mean trading with big lots and try to gamble Your way through …..DON”T do that pls ! )

Because that’s nonsense..!

For myself, it is when I decided to make all my tradings as simple as possible….

Formulating proven & simple stock trading strategies which consists of the more powerful Price Actions in the stock market…

That is the real turning point for me..

And I really mean a MAJOR 180 degrees change in terms of the results I am getting each month.

Of course, the profits accumulated in my trading account also makes me sleep with a ” smile ” every night too then..

Seriously speaking, this strategy on Bullish/ Bearish divergence is indeed a very powerful stock trading strategy one should add to their arsenal.

Not only can You predict a ” trend reversal in advance ” with this divergence strategy..

But it also gives very good ” risk/ratio ” trading opportunities as well.

If You have not master it yet…

It is really worth putting in a little more effort and time to master this powerful stock trading strategy indeed.

It might come hardy when You are searching for a good ” trend reversal ” a few days later after You read this post ! * grin *

So much for this post.

I hope You have enjoyed what I wrote as well as learn yet another simple yet profitable stock strategy today ! * grin *

Happy trading.

To Your Success,

- Bruce Ho ( author & your friend )

Posted in Stock Trading Strategies, Trading Bullish Divergence With MACD | 138 Comments »

Stock Trading Failure – Why Most Traders Fail When They Use Complicated Stock Trading Strategies !

December 10th, 2010

Why Most Traders Fail In The Stock Market When They Use Complicated Stock Trading Strategies ?

Find out below…

Why Traders FailIt is already a statically proven fact that most aspiring traders would fail to achieve the  success they truly want ….. trading the stock market.

Most would struggle along the way, failed badly subsequently and then ultimately GIVE UP totally.

It is definitely NOT because these traders are unlucky though.

Because we do not need any luck when trading the stock market ( or other financial market )

When one’s psychological aspects are rightly tuned for the trading game..

As well as armed with a set of proven stock trading strategies..

Then he/she is all set to win & being able to profit ” consistently ” from the stock market…….. if they want.

And in this article, I will focus on the psychological aspects which directly affect & lead to a trader’s miserable failure.

For anyone reading this article, if You’re still a beginner to stock trading and have not suffer the frustration from losing yet..

It is really critical for You to read though this article, understand it and instill what I have to share into Your mind once and for all….. ( if You’re serious about succeeding in the stock trading! )

Let’s start.

———————————————————————————————————————

For traders starting out, they simply love to add TOO MANY technical indicators

———————————————————————————————————————

For most stock traders starting out, they would first experiment with just a simple stock trading strategy.

It could be just trading with simple Price Patterns such as Double Bottom / Inverse Head & Shoulders perhaps.

But over time, they would naturally think that ” more is better “…

So they keep adding one technical indicator after another one….yet another one…..and another one.

In the process, making the entire trading chart so messy and confusing.

In the trading world, it is very common for ” traders who are NOT making any money ” to ASSUME that :

…….” traders who are making a lot of money are actually using very complicated Stock trading strategies ” ( which consist of 5 or more technical indicators ! )

Moreover, it is also our human nature to believe that making money from stock trading using very little effort ….or very simple stock trading strategies is just NOT possible at all..

Hence, traders ( especially newbies ) would start learning all kind of complicated stock trading strategies, reading very tedious company cash flow balance sheet, or analyzing months of  “mind draining ” news from feeder service.

Which in the process DID Not make them a more powerful trader……but rather – A More Confusing Trader.

For those of You who have been trading the stock market with great success every month…..

…..You will also agree that MORE is indeed NOT Better when apply to the stock trading analysis process.

Over-complicating Your analysis and following complicated stock trading strategies is one of the first psychologically induced problem that traders will encounter.

Unfortunately in the world of  trading, once the psychological aspects are messed up…..

…..Then the entire  stock trading journey will be very challenging and filled with undesirable frustrations.

And once the vicious cycle started, traders will begin losing money….and losing even more money….again and again until they either give up or treat it as a form of gambling !

These losing traders would be so much affected by the money they lose in the stock market that they did NOT actually realize that they are doing something wrong in fact.

So if You have not fell into such vicious cycle yet…

OR……already started to lose money and it has impacted on Your trading confidence now…

It is NOT too late to learn the TRUTH & overcome Yourself  today though…

——————————————————————————————–

Choose To Use Only Simple Stock Trading Strategies

( as simple as possible…..even just trading on a CLEAN chart ! )

——————————————————————————————-

Discard all the overly complicated stock trading strategies You used to follow previously that cause You to lose  money..

Accept that when You employ a simple stock strategies out of just a clean chart, You are going to analyze the market better and make better trading decision.

If You are still trying to analyze the mathematical formula behind those technical indicators You are using before…..abort that task too please !

Also, if  You’re still searching for the ” holy -grail or magic ” stock trading strategies to help You make insane amount of profits from a tiny amount of money……please stop too !

Because they do not exist at all……( sad to say  )

Instead, You should just channel the energy You have to learn simple stock trading strategies that can reduce emotional / psychological complications..

…And enable You to make steady & consistent profits over time.

————————————————————————————————————-

Hey Bruce……What Do You Mean By Simple Stock Trading Strategies ?

————————————————————————————————————

The most straight forward, none lagging & effective way to trade the stock market ( or any financial market ) is to use Price Action based strategies.

When You stripe all the technical indicators off Your trading chart, revealing only a totally CLEAN chart..

( leaving candlesticks/ bars & volume indicator are fine )

Then that is the Price Action in the market You need.

Price Action is such important for one’s winning probability because it is the core data of the market.

It is the ” Truth ” of what You see in the market.

When You rely on the many so called ” textbook technical indicators “, You are only relying on Lagging Signals from these indicators.

Because most of these technical indicators merely rely on past price history to calculate the signals.

Some traders can even tell me that they are actually waiting for ALL 5 Technical Indicators to align first BEFORE they can get into a trade….

Phew……( sweating )

But when I look at the chart using merely Price Action analysis, I have already gotten into the trade and ” in the profits zone ” now !

YES ! With Price Action based strategies, You really can get ahead of other traders who are relying on the so called Lagging technical indicators.

So if You have been relying on them and always too late into a trade…….or too late to exit a trade …which caused You to lose money..

Now You know why !

And want to know something even more ” shocking ” about Price Action based strategies ?

—————————————————————————————————————

Let me share with one of my very own experience :

Sometimes though the entire month, I am trading using nothing but just simple support / resistance….

As well as reversal patterns such as the ” Double Bottom / Inverse Head & Shoulders ” only !

And the Profits I made are far better than when I combined 4, 5 or even 6 different technical indicators.

No joke on that.

———————————————————————————————————————

If You have been reading about my stock trading strategies blog, You would have noticed that no matter what that strategy I share.

I will sure based my final decision on the Price Action in the market by analyzing either – The ” Closing Price or How The Candlesticks Formed “…..

That means I based my final decision on Price Action analysis in the market.

( Which explains why my winning accuracy is pretty high across all my stock trades. )

If You die die must use a certain technical indicators for Your stock trades..

Then I strongly advise that You at least based Your final ” entry / exit ” decision on the Price Action in the market too.

This could save You from entering too late or exiting too late.

Don’t believe ? Try it…

——————————————————————————————————-

To WIN More, Don’t Overly Analyzed Your Trades

—————————————————————————————————–

When we use Price Action based strategies to trade.

Our mentality is very clear of what is happening in the market.

Believe it or not…..our mind is actually program to make us LOSE in the trading game.

It is only after You can overcome Your mindset then You will see more winning frequency.

In fact, most of the mindset that work with other professions actually do not work with the trading game.

Why so ?

Take a doctor for example.

A successfully certified doctor might want to try trading the stock market.

They might have heard that trading can make them a lot of money in a really short time…

So they decide to give it a shot too thinking that since they can make it through the medical school, trading should be easy for them too..

The problem here is that the mindset learn from medical school :  Complex analyzing, intense Studying, and overall thinking that ” more is better ” to remain competitive in school or at jobs ……

……These traits would not do them any good in the trading market though and in fact, it would be detrimental to their progress even.

—————————————————————————————

Emotion Control Is The Key To Winning

————————————————————————————

The key factor that determines loser from winner is none other than – Discipline and Conscious control over Emotion state.

Emotions can be helpful in other professions but it is actually our worst enemy when trading is concerned.

In other words, one needs to overcome him/ herself if they are serious about succeeding in trading.

Discard complicated ones and only trade with simple stock trading strategies is the first step any aspiring traders should take in order to achieving long term success with trading.

So clean up Your charts ……stripe off all the technical indicators & trade only with Price Action analysis.

That is truly the first logical step toward achieving Your goals with stock trading.

Posted in Stock Trading Strategies, Why Most Traders Fail In Stock Trading | 62 Comments »

What Is The Simplest Stock Trading Strategy To Know IF The Stock Market Has Bottom ? Read This

December 10th, 2010

Ever since I started this blog sharing stock trading strategies…

Many fellow readers from all over the world have wrote in to me asking all kind of questions related to stock trading.

And do You know what is one of the most common questions ( out of the 1,097 ) I have received so far ?

It is exactly the ” title ” of this post actually.

Most of them simply want to find out on this :

” Hey Bruce…….can You share with us what is the ” Simplest stock trading strategy ” to know if the stock market has bottom …? “

This question never fail to appear on any stock traders’ mind & obviously there is a ” million dollars ” reason to it..

Now…..If You have the ability to know if the stock market has bottom….what  would You do next ?

Of course go in and buy some counters to make some money for Yourself right ?

Or perhaps for the losing trader who are still holding onto paper loss…..they are even more anxious to know when is the market going to bottom & climb again…

( because they want to sleep peacefully and not waking up to see even more losses to their losing positions the next day ! )

Since this is one of the most common questions that most stock traders want an answer for..

Then I shall share my way of catching a stock market bottom here in this post to share.

And trust me, it is indeed one of the simplest way to do it.

No technical indicators or complex analysis needed on Your part – That’s the beauty of this stock trading strategy.

Instead, we are merely using a few of the most proven ” Price Patterns ” formation that occur in the market to help us conclude if it is really a bottom.

Read on for now.

——————————————————————————————————

What are the few proven Price Formations I am talking about then ?

——————————————————————————————————

Personally, there are 2 which I love to use very much.

And on some months, I trade using nothing but only these 2 Price Formations.

That’s because they are very easy to identify and Super Reliable.

Of course….they enable me to grab nice profits from the market most of the time as well.

These 2 proven Price Formations that have given me much success are namely :

-  The Double Bottom Formations……as well as

- The Inverted Head & Shoulders Formation

———————————————————————————

Here’s how the exact formations look like :

———————————————————————————

( Double Bottom )

Double Bottom Stock Trading Strategies

( Inverse Head & Shoulders )

Inverse Head & Shoulders Stock Trading Strategies

Perhaps some of You guys already seen these formations before…( or are using it for Your own tradings now )

Or…..Perhaps some of You guys already tried using these formations before but just could not get the results You want….

( ….Because most of the time You’re probably losing in the market )

No matter what Your experience with these formations are….

I can assure that You sure have something to learn from the ” stock trading strategies combining with these price patterns “…. below.

Especially after You learn from the actual live trades I executed using these  exact price patterns.

I can get very good results using either of these formations….NOT because I am lucky or smarter than You guys definitely.

It is purely due to the fact that  I am NOT using it like most traders do.

And my technique would enable me to get in ” much earlier ” ….& with Minimum Risks. ( as compared to other traders )

Whether You want to trade the short term market…..or the longer term market..

I can show You how to Effectively use these formations to spot for a Bullish reversal in the market.

More on that later.

For now, let me explain to You how come these formations such as the ” Double Bottom / Head & Shoulders ” occur in the market.

By understand how these formations are formed …..and by knowing that they are the exact results of human emotions in tradings…

You would be more confident when based Your trades on these Price Patterns in future …..I am sure. * grin *

————————————————————————————–

How Did These Price Patterns Occur In The Market  ?

———————————————————————————–

Double Bottom :

In a Double Bottom formation, the base looks exact like a twin valley.  ( scroll up to see the picture again if You want )

At the first valley, a support is formed at a level where buyers rush in to place their BUY orders.

Subsequently, the price starts to climb higher and the buyers decide to temporary take some profits first.

Sellers who are still bearish on the market jump in and sell into rallies too.

With the sellers selling and buyers taking profits, their combined effort ( once again ) drive the price down again.

This time the price fell to the previous low BUT….. this time the sellers find it less attractive to sell  at a lower price.

Buyers, upon knowing the price has fell to such lows again, find it a good bargain to BUY AGAIN.

And price rebound successfully at the level exactly about the previous low.

This time round forming the 2nd valley.

That’s how a Double Bottom formed in the financial market.

I know some books’ explanations would drag to a full 10 pages just on the formation of double bottom…

But that’s not my style.

I only try to make things very simple to understand and explain in the simplest way to help people understand too.

Am sure You don’t like to read too complicated stuff right?

So now You know…….how a Double Bottom is formed !

Errrr……Isn’t my explanation simple and straight to the point enough ?

It is right…! * grin *

And Now We Shall Talk About The ” Inverted Head & Shoulders ” Formation

This pattern looks exactly like the human head & shoulders.

Especially with the head extending well below the 2 shoulders.

The left shoulder & the head are the results of continuous selling by the sellers. ( a down-trend )

The head portion is mainly caused by PANIC Selling in the market.

That is why it plunge much lower at a much faster pace forming the ” Head ” in the process.

At this point, buyers are attracted by the ” Very Low ” prices as they have been waiting at the side line monitoring this plunge throughout.

Bullish traders who are ” more brave and aggressive  ” charge in first & decide to start buying at this LOW.

…Those already waiting patiently at the side line also join in the fun and enter to buy at the ” head ” for super bargains.

When a right shoulder is formed after the head….

It is indeed a very good clue ( by then ) to anticipate a Bullish Reversal in the market.

The right shoulder ( also know as the ” higher low ” ) signifies that buyers are willing to buy a higher price than the previous low.

With the formation of the right shoulder, it also directly reflects the ” mindset ” of the Buyers.

They are simply too impatient to wait for the price to reach the previous of the ” head ” again..

They are willing to get in earlier and buy at a much higher price now.

Hence, from the formation of a ” Inverted Head & Shoulders ” , the probability is very high that a up-trend is resuming soon ! ( and the buyers are willing to buy again )

That’s about it for You to know about ” how ” the Inverted Head & Shoulders are formed.

Now You know ……* grin *

Next, let me share with You one of my live trade which only rely on nothing except these Proven & Profitable Price Patterns in the stock market.

——————————————————————————————————

My Own Trade Using These Profitable Price Patterns To Share

( Profiting From The Bottom Reversal )

——————————————————————————————————-

Like I mentioned earlier at the start of this post…

Both the ” Double Bottom ” & ” Inverted Head & Shoulders ” are very good indication that the stock market has bottom.

( No guarantee that it would climb a lot…but at least we know that the market is going to have a Bullish Reversal soon….!  That means profits to grab )

Of course, if You spot these Price Patterns on the bigger time frames  ( such as 1 month / 3 months )…..and the prevailing trend is UP….

You can then prepare to aim to ride for major bullish reversal ….for MASSIVE Profits.

At the time of writing this posts, most of the indexes has already recovered 200% since the major plunged in 2008.

Even the  major Straits Time Index ( STI ) in the country where I belong (  Singapore ) has already crossed the 3,000 points.

It actually fell to the region slightly below 1,500 points then.

Almost a 200+% recovery now.

Likewise for other major indexes as well…..such as the Nikkei, Hang Seng, DJ…..etc  ( recovered a lot as well )

So if You pull out the chart of these major indexes and switch to the 3 months or bigger time frames, You will be able to see couple of these Bullish Reversal Price Patterns too.

I am sure a lot of investors with a really deep pocket are pumping in their millions or even billions just purely relying on these Bullish Reversal Price Patterns forming in the market.

Because they are reliable !

( and they are sleeping with a big smile now ……* grin *  ….and YES ! I did pump in abit too…not billions though …LOL )

I am not really a long term investor though.

I would consider myself a ” trader ” instead.

I get in for a position fast….and take profits in a rather short period too.

Most of my trades would last between 1 days – 2 weeks max.

Using these Bullish Reversal Price Patterns on the bigger time frame is easy though..

Just wait for a serious plunge to happen and once it dies down, look out for their formations. That’s it.

On the other hand, using these Price Patterns to trade the short term stock market bottom can be tricky for most. ( although profitable )

Hence, I will illustrate on a stock trading strategy which I combined with these Price Patterns to share below .

Let’s go into it now.

—————————————————————————————————-

When I spotted this Stock Counter ( Q )….

The ” Inverted Head & Shoulders ” pattern has already completed and the price has actually climbed up to the $5.45 level….

…..and now starting to retrace again.

But if  I manage to spot for this stock earlier, then I would enter to BUY at the ” Beginning of the RIGHT shoulder ( check above in the picture ) “.

With that entry level, I can realistically aim for a conservative profits of $ 0.15 – $0.18 definitely.

( Which the price indeed climbed for some distance ..as You can see from the chart above too )

But it is alright that I missed the previous trading opportunity…

I shall add this counter to my watch list and see how it turns out since it has an ” Inverted Head & Shoulders ” formation previously.

After about 1.5 weeks later, this is what I spotted :

The price has actually stalled at the level very close to the previous low.

But the thing is that this time round, a PIN-Bar is formed at that level too.

If You guys don’t know what is the significance of a Pin-Bar. ( like in the chart above ).

Let me tell You that – It is a very high probability candlestick formation for a Bullish Reversal……

Or at least it would mark a ” Turning Point “.

So do I jump in and place my BUY order upon spotting that Pin-Bar ?

No…of course Not .

Not time yet as the ” hint ” is not good enough to convince myself that it could be a double bottom forming in process.

I need to at least see a bullish candle formed after this…… before  I would commit a BUY position.

After a few days of waiting…..buyers begin to take up their buy orders and trigger a formation of a Bullish candle.

That’s when I join the majority and take up a short term BUY position too.

Like This :

Having spotted the Bullish Candle closed.

I know it is the ” high probability ” set-up I am waiting for.

I then place my BUY orders and manage to get filled at the price of $5.27

At the same time , decide to place the Stop-Loss at $5.20 ( for a risk of $0.07 )

However for this trade, I did not have much time to monitor ( even on a daily basis ) as I am on a holiday trip with family in Aussie then.

( Still missed the fresh oysters & yummy fish & chips till now…..although it’s been months back ..* grin * )

Furthermore, the fundamental at that time is not good enough for me to ride the trend further.

So I just aim for a really short term and quick profits.

Which I then set my Profit Target at the price $5.42 ( $0.15 profits )

( Which is also below the Previous Low…….” realistic ” profit target I should say )

——————————————————————————————

So How Did This Trade “ Finally “  Turns Out For Me ?

—————————————————————————————–

Here’s the answer for You :

Double Bottom Stock Trading Strategies

After 2 trading days, the profit target was hit at the price of $5.42

In fact, the price did NOT even pull-back slightly…..but CHARGE UP fully.

Why so ?

That’s because these 2 Price Formations ( Double Bottom & Inverted Head & Shoulders ) are being watched by professional traders as well as major banks & institutions all over the world too.

For the simplest reason – These price formations work & very reliable most of the time for them.

In any trading game, as long as You’re ” Following ” the big players….You would most likely end up with profits too.

That is why Price Patterns formation as well as Fibonacci are so reliable……and You should know why by now !

This quick trade made me about $1,480+ in profits. ( after minus comms )

—————————————————-

Here’s the earnings to share :

————————————————–

( before deducting commissions )


Up till this point, I think I have already shared what is required for You guys to understand how to catch the ” signs ” of a stock market bottoming.

And all You need is to know how to spot the 2 proven Price Patterns formation namely :

- Double Bottom Formation

- Inverse Head & Shoulders Formation

If You are still not very confident with spotting them yet.

Don’t give up now though.

Just try to spend more time scanning for them.

You can try on different stock counters….or other financial market such as forex or gold trading.

As long as it is a financial chart You’re looking at, I am very sure they exist.

——————————————————————————————————————

Trust me when I say this :

“….It is really worth the effort and time put in……. in order for You to master these Price Patterns indeed. They will do You good ( and Your trading account too ) in the long run ! ” * grin *

——————————————————————————————————————–

So to prove my final point, let me show You one more proof of why these Price Patterns formation are so reliable and profitable..

Do You know what happened to this stock after I take profits ?

It EXPLODED to the upside !

Here’s the chart to show You :

Double Bottom Stock Trading Strategy

From the chart above, You can also see for Yourself how the price climb ( really fiercely ) up too.

And it is after the period where I spotted both the ” Inverse Head & Shoulders ” & ” Double Bottom ” patterns in the market.

After I exited at the price of $5.20 for my trade.

The price then climb to the current price of $7.20+

Really very bullish….(  & am sure You agree on that too )

“….So BRUCE, did You re-enter again after You came back from Aussie holiday and grab some profits from this BULLISH Stock ? “

Of course I did !

But that’s around the price of $ 6.40 – $6.60 region.

I intend to talk about the re-entry on another post sharing a different stock trading strategy though.

Which I will do it when I have the time to do so.

Recently I joined my buddies and actually took up golf lessons.

My wife and little ones also took up lessons in the driving range for some fun too.

So definitely that is a very good reason for me to say :

” I am sort of busy now …..so I will post again when I am more free ! “  LOL

Jokes aside for now, don’t worry as I will post more stock trading strategies to share really soon.

I will make time even after I am very tired from my golf  lessons ya !

Fair enough ? * grin *

Thanks for reading this far.

Hope You are more familiar on what stock trading strategies You should use when You spotted ” Signs ” of a stock market bottoming now.

Remember….practice makes Perfect !

To Your Stock Trading Success,

- Bruce Ho ( author & your trading friend )

Posted in Double Bottom Stock Trading Strategies, Inverse Head & Shoulders Stock Trading Strategies, Stock Trading Strategies | 117 Comments »

Combining Fibonacci Into Your Stock Trading Strategies For High Accuracy Trading !

December 8th, 2010

If there is one thing You should know in order to profit from the stock market ( or any financial market ) with high accuracy…

Then it would be the almighty Fibonacci !

Whether the stock market is Trending or merely in a Sideway market, including Fibonacci into Your stock trading strategies can definitely help You big time.

In fact, some veterans & professional traders even commented that Fibonacci has the ability to foretell where the price is going next..

I seriously urge You to read this article carefully and really understand the entire stock trading strategy I am sharing below.

If You don’t understand at the first go…..do make sure You read it 2nd….3rd or even 4th time !

Trust me, it is going to be SUPER beneficial for Your future stock trades.

—————————————————————————————–

But BRUCE…… Why Fibonacci & What Is It About  ?

—————————————————————————————–

The founder ( Leonardo Fibonacci ) discovered the Fibonacci Numerical Sequence.

….& even proved that it is not impossible to foretell future price in the financial market after all.

Instead, the market would follow a typical numerical sequence…..  in which traders ( once interpret correctly ) can literally use it to Predict future price movements with high accuracy.

From then on, using Fibonacci has became a very important aspect for most successful & winning traders.

Why so ?

Simply because Fibonacci is indeed a very powerful tool to be included into any stock trading strategies.

If You are not using this magnificent tool for Your trading yet…

Then You might be leaving a lot of profits on the table all these while !

But fear not, it is NOT too late to learn now though.

Read on below as I share in a Step-By-Step ….easier to understand manner to help You understand in an hour’s time from now ! *grin *

——————————————————————

Using Fibonacci In Stock Trading

—————————————————————–

In Fibonacci, there are 2 aspects one needs to know.

They are the :

- Fibonacci Retracement……as well as

- Fibonacci Extension

And in this article, I am only going to talk about the more commonly used  Fibonacci Retracement.

The extension aspect is hardly used by me as I have my very own self-formulated exit strategies.

You can read up the Fibonacci Extension on Your own….. if You want..

But I doubt You would use them very often though.

( This is more so after You learn about my time-tested & super effective exit strategies which I will be sharing . * grin * )

—————————————————————————————————-

Important Fibonacci Retracement Levels You Should Know

—————————————————————————————————

After the price has moved a distance in the market…

It would pull-back to a certain Fibonacci Levels namely :

- 23.6 %

- 38.2%

- 50.0%

- 61.8%

- Or……78.4%

For my own stock trading strategies which involve Fibonacci, I would only use the last 3 levels.  ( 50.0%, 61.8%, 78.4% )

In fact, most of the time, I would just use 50% and 61.8%..

I hardly scan for any retracement that has breach the 61.8% level actually.

….Unless it has formed a ” obvious ” Double Bottom / Double Top in the market.

( but that would be in any stock trading strategy which I would not talking about today )

——————————————————————-

Fibonacci Retracement As A Support

—————————————————————–

After the price have moved from point a to point b……. it could then retrace / pull-back to an area around point C  ( due to profit taking activities )

This also explains why every-time  You jump into the market….. although You have spotted an up-trend, the market would always turn against You – This is the reason. ( profit taking )

Now You know ya…! * grin *

Let’s continue with Fibonacci….

……Where were we previously ?  ( Oh ya…..I recall now.)

So what You need to know for an up-trend is that :

- After price move from point a to point b, we can then anticipate a retracement to point c.

——————————————————–

Likewise for a Down-Trend :

——————————————————-

For a Down-Trend, the opposite would happen :

…When the price has moved from point a to point b, it could retrace to point c  .

( forming a Resistance this time )

Traders like You and me can then take advantage of this retracement to enter into the market for a good risk/reward trade.

Because we won’t be buying HIGH  ( for up-trend )…

…..Or Selling LOW ( for down-trend ) anymore..

Just by taking advantage of this retracement / pull-back for Your trades, it can really make a significant difference to Your monthly profits. ( better of course ! )

However, one critical factor I must emphasize here about using Fibonacci though.

Please Do NOT jump straight in just because the price has hit any of the Fibonacci levels ya.

In order to secure high winning accuracy for our trades, we still need to look for other ” hints “ from the market before we commit into a position.

Nothing beats learning from my live trades ……. as well as my entire decision making process agree ?

( You knob Your head meaning agree….)

Alright, let’s not drag further and get into the main stock trading strategy combining this powerful Fibonacci next !

———————————————————————————-

How I Use Fibonacci To Trade & Profit Big Time

———————————————————————————-

To illustrate this strategy, I will share a trade which I use to profit from the stock counter name Apollo Investment Corperation ( AINV ).

In fact, I have been monitoring this stock counter for a while now….just waiting for a good retracement level to get in.

However, the price only retrace to the 38.2% region initially…

Which is not the levels I would trade.

I am only willing to get into any position when the Fibo retracement levels hit at least the 50%.

( Yes….I would rather missed a trade THAN to jump in due to impulse…..only to feel Regret & Fearful after )

Don’t ever put Yourself in that situation please !

It is really detrimental & could ruin Your tradings confidence in the long run…..no good.

From the illustration above, You can also see that the price of this stock  actually formed a strong support ( bottom )….

….  & the price actually re-tested it a few times before climbing up.

This gives me a good sign that the selling has stopped & an up-trend might be coming soon.

But although the price has started to pull-back/ retrace……I would not get in yet as the price HAS NOT reach the 50% Fibo line I have plotted…

I would not commit to my bias to BUY / Go Long without seeing that.

So how then ?

Wait for the market to come to me of course !

Remember this rule – Winning traders wait for the market to ” COME TO US “…..

We DO NOT chase the market ….!  * grin *

The above is a mandatory rule to instill into Your brain once and for all……IF You want to succeed with any trading game in the long run.

So did the price retrace to the fibo levels I wanted ?

Here’s the answer :

The price indeed retraced to the 50% Fibo level I have plotted recently.

( after patiently waited for days !  Being patience is indeed a virtue in trading * grin * )

But it was not until I saw a Bullish candle closed before I ” finally ” decided to go LONG / BUY.

Another good sign is that the Bullish Candle also closed ABOVE the 20 EMA ( red ) I plotted on the chart.

At least it gives me more confidence to commit with all these ” congruence ” factors.

I managed to buy at the price of  $10.12

And set the Stop Loss at the price of $9.80

( that is about $0.32 risk I am taking for this trade )

Since from the chart, I have already spotted a ” very Strong Support ( Bottom ) “…… that I told You earlier.

And the price actually climbed off that level and have retraced to the 50% fibo level now….

With all these aspects, it is already good enough for me to try to ride the up swing for maximum profits.

I use the word ” Try ” because :

…..Like I always emphasize, nothing is guarantee in any trading game.

So it is OUR responsibility to put all odds on our side if we want to WIN Consistently.

This also means it is very CRITICAL to plan ” when ” to take profits along the way.

The market MIGHT move in Your flavor for a certain distance …

BUT….that DOES NOT guarantee that it would hit the Profit Target You want…..( remember )

Hence, it is definitely ” Wise ” to have some proven ways to ride the profits and secure them along the way.

In order to achieve this, planning Profit Targets can be tricky here too.

The key to avoid any big disappointment is to AIM Conservatively.

When You don’t have BIG HOPE…..You will not hurt that much if You fall…….agree ? * grin *

So if You only know ” When ” to enter into the market ….but can’t plan profit targets properly..

Then You will Still Struggle to win consistently with Your stock tradings most of the times.

————————————————————————————

Here’s How I plan my 1ST & 2ND Profit Targets to share :

———————————————————————————

As with most of my stock trading strategies, I will deploy a multiple exits strategy.

With that , I will exit partial lots at some pre-determined levels.

( unless I am doing short intra-day scalping for quick profits ….then that would using a different exit strategy )

It is really important to know how to aim for profit targets properly.

Getting into a trade is very EASY…..anybody can do it I am sure.

But knowing ” when ” to exit can determine whether You have a LOSING …..or WINNING trade.

If You have traded the stock market for awhile now…..

Then perhaps You can also relate Your own bad trades to the scenario I mentioned above.

If  You’re still not too confident, it is worth spending some effort and time to master on that area.

Here’s How I Planned My 1st ( Conservative ) Profit Target:

Refer to the above illustration again, You will notice that I am actually using the previous resistance as my 1st profit target level.

The reason why I chose to use this resistance is due to the simple fact that :

“…..Since that is a top before the price retrace, then perhaps there would be sellers waiting at that level again to SELL again ”

It is logical that I aim for my 1st profit target at that resistance point right !

WRONG !

We don’t aim exactly at that point.

We aim ” slightly  lower ” to increase the probability of WINNING. * smile *

Hence, I set my 1st Profit Target exit point at the price of $10.50…

….Which gives me about $0.38 profits per unit if that profit target is to be hit.

Since my risk is $0.32, this trade is still good to go as I would still be getting a risk/reward ratio of  ” slightly better than ” 1 : 1.

————————————————————

As For The 2nd Profit Target Exit

———————————————————–

If the trade goes my way and hit my 1st profit target..

I will then exit the 1st partial lot with Profits …..and then

…..I will also shift the Stop Loss level for my 2nd lots to ” Break – even ” at the same time.

Then just allow the trade to ride the trend further until I see some signs of  ” reversal “.

But Bruce…..How Do You Spot For Such ” Reversal ” Sign  ?

Read on & find out below please.

———————————————————————

So How Did The Trade Turns Out Then ?

——————————————————————–

The 1st Profit Target set at Price $10.50 was hit on Sept 30th.  ( which is 6 days later )

Which means I have already secured some nice profits in my pocket now.

So what is the next important thing I should do before I can ride the trend further without Losing ?

Yes, we should shifted the Stop Loss for the 2nd lot to the ” Break-Even ” point now.

At least if the market reverse, we would NOT lose back all the profits we gained for the first position.

Simple.

On Oct 4th, the price nearly hit our break-even point actually.

But fortunately, it did not as there are still allowance of 8 cents before hitting.

( You can check out the chart above on the Oct 4th Bearish Candle for this ” nearly ” hit situation )

The trend then continue to climb further to the up-side…… and it also means making my trading account fatter & fatter….* grin *

After about 2 weeks of holding the 2nd lots, I choose to exit from this trade upon spotted a scary ” Evening Star ” Formation.

And this is a really ” Perfectly Formed ” Evening Star to say.

I chose to exit after the Long Bearish Candle closed.

And then the price continue to plunge further after that.

So never never underestimate the strength of such reversal formation such as the ” Evening Star Formation “.

It can indeed give us a very early warning to secure our profits and exit before feeling regret later on !

How about Yourself…… ?

Have You master the common ” reversal candlesticks formation ” that’s happening in the stock market yet ?

If You haven’t…..better do so.

They are very beneficial to Your tradings.

Especially when You use them as ” Congruence ” with other set-ups……the winning accuracy could be increased tremendously.

That’s why I love to trade with ” Congruence “….

I hardly rely on just one ” hint ” from the market though……if You notice now after reading my stock trading strategies shared so far in my blog.

So at this point, have You manage to fully understand how I trade using the Fibonacci Retracement now ?

If You were to do it on Your own, are You confident that You can do it as good as me ?

Well too early to say now I know…

To help You further, let me summarize the important aspects of this stock trading strategy combining Fibonacci Retracement below to share :

———————————————————————————————————

1)  After You spotted a price that have moved from Point A to Point B ….( Whether up or down )

2) You can then get ready to anticipate the price to retrace to Point C – which is the halfway or 50% point.

Example:

If the price climbs from $1 ( point a ) to $2 ( point b )….then $1.50 would be the point c for a 50% Fibo retrace.

Simple as that.

The 2 important levels that I personally like to watch are the 50% & 61.8% retracement.

3)  When the price has retraced to these levels, please DO NOT jump in straight away.

What You should look out for is some kind of ” Turning points / Reversal set-ups ‘ forming at that level.

( Such as  :  Long candle breakout in the direction You want to trade or maybe a pin-bar……too long a list. )

BUT bottom line is ….You should at least look out for a Candle Closed in the direction You want to trade.

If Your bias is Up-trend, then at least You should see a bullish candle closed which bounce off the Fibonacci levels You want.

4)  In the event You want to ride the trend for maximum profits, do make sure You have a way to secure profits along the way.

( PS: You can also do the same as me – using 2 different lots for partial exits. But do make sure that You have to plan the stop -loss & Profit Targets levels properly too. Else it would not be effectively. )

The bottom line is :

IF You cannot see the ” set-ups ” that make You comfortable, do not trade.

….Just go scan for other counters that have the set-ups that make You comfortable to trade with.

There are more than 5000 different stock counters around !

Agree?

—————————————————————————————————–

Go practice it…….master it…..and then let me know how You fare then.

If You need my help, just pop me an email using the ” contact us ” page .

I am just an email away. * grin *

So can I sign off now ?

( Hey wait Bruce…….)

Me :  What else for me ?

You guys :  How much have You made from this trade then ? ……Share pls

Sure You want to know ?

Me :  Troublesome manz, I still need to login to the trading account and take screen-shots.

You Guys :   Use those earnings to help inspire us manz …..

Me : Hmmm……alright. alright…

* laughing out loud after *

————————————————————————————————-

Here are the 2 earnings to share then :

( 1st partial exit profits)


( 2nd partial exit profits )


Thanks for reading this posts.

I hope You have learn another winning stock trading strategies to add to Your trading arsenal.

Happy stock trading & plotting the Fibonacci Retracement !

To Your Stock Trading Success,

- Bruce Ho ( author & full time trader )




Posted in Fibonacci Trading Strategies In Stock, Stock Trading Strategies | 135 Comments »

Stock Trading Strategies – Combining Price Pullback & Trend Riding Strategy For Maximum Profits

December 7th, 2010

When I ask any stock traders this  – ” What stock trading strategies do You use to profit from the market most of the time ? ”

9 out 10 times, he/she would for sure tell me that they are using a ” Trend Riding Strategy “.

Just as the old saying goes …..The trend is Your friend, catch the right trend in the stock market and ride fully !

This simple sentence can indeed make any trader very excited…..

……even to the extend of attaining ecstasy upon hearing it.  ( Sounds incredible right ! )

That because it is already known to all traders that once we can ride on the Right Trend…

The profits can be really EXPLOSIVE. ( and sometimes in a really short period of time )

However, in this realistic world, nothing is perfect….

Nothing Is Guarantee either….and this applies to stock trading strategies as well.

I do not have to emphasize that there are no stock trading strategies in this world that guarantee 100% winning accuracy.

You should already know this by now too…..I hope.

Of course, if You have been jumping from one strategy to the next newer one hoping to find the ” perfect ” stock trading strategy to help You make money from the market..

BUT ” always ” most of the time, You are simply NOT getting any positive results at all…

After spending many hours trading with Your so called newly acquired stock trading strategies…

….You only end up seeing a BIG Deficit in Your trading account.

Very de-moralizing & disappointing scenario indeed.

I truly know this kind of frustration so well because I was once in that ” losing ” vicious cycle too with my stock trades.

It was only until I figure out some ” truth ” about the stock market ( or any financial market ) that I start to see slight improvements….

AND….slowly leads to very significant improvements and success as the months gone by.

( I keep trying and never  want to give up no matter how hard it is )

Soon after more than a few years of intensive research, I have in my trading basket many proven stock trading strategies which I self – formulated.

And the best thing is that I have fine-tuned these strategies into ” Absolutely Simple to use….. yet Very Profitable strategies ” to ace the stock market.

The ideal way to learn anything new is to absorb them bit by bit each time….

Understand every single details…….Practice them…..and finally mastering them…

That’s the way to go.

And in this post, I will be sharing on a Stock trend riding strategy combining with the important Price Pull-back set-up for You guys to learn.

If You are serious about learning a stock trading strategy which can help You zoom in on the start of a trend…

…..and most of the time, it is also a ” Very Explosive ” trend in which You can grab a lot of profits from the massive move..

Then what I have to share below is a must read for You.

But wait….before we go into the meat of this trend strategy.

Don’t You want to know why I am combining it with the Price Pullback ?

If  You have been reading though my stock trading strategies blog previously..

You would have  noticed that whatever I integrate into my trading strategy, there is sure a logical reason to it.

And the same goes for the objective of this ” Price Pullback ” as well..

It is actually to save us from ” buying too high “……or ” selling too low “.

Meaning by taking advantage of the Price Pullback during a trend, the risk can be minimize…

….And MOST IMPORTANTLY – The Profits can be MAX out at the same time.

Best of both world indeed.

Alright….I am not going to drag any further now.

Let me share this trend riding stock trading strategy in a step-by-step manner for You below :

For any financial market, the movements ( direction ) are basically driven by human emotions and decisions.

They are :  Buying ……Selling…..Profit-Taking ( can be due to fear/ greed )……or Perhaps Stop Loss getting hit.

That’s about it.

Since human nature do not change….. as after all, the only living things trading the market are only human beings..

Then there are certain Price Action or Price Formations that can give us a very close hint of  what we can expect next ….

The key reason why this trend riding stock trading strategy is so effective……. is NOT because it is a holy grail or magic strategy.

But solely because it takes into account the natural ” market behavior ” .

———————————————————————————————————

Here’s what I mean :

1)  A channel of sideway market CANNOT remain sideway forever……as it has to ” Break – Out ” and goes somewhere.

( whether up or down )

2)  And when the ” Breakout ” is very explosive, then we can expect the price to move in that distance for a fair bit.

( and of course we would go in and grab those profits accordingly when we spot this )

3)  However, when a ” Breakout ” is so explosive and price already GONE so far a distance…..there’s NO WAY we can simply jump in and hope that it would go our way further…

Yes…sometimes it would continue in that direction further..

BUT…….there is still a ” but ” here.

What if  it doesn’t continue further ?

What if  it reverse on You straight away making You realize You are actually ” Buying HIGH “….

The worst position for any trader to take indeed.

And that is also why most traders lose so miserably NOT knowing why each time they jump in ( although they see a trend )……the market always reverse on them !

To avoid this ,  the only way is to wait for a ” Price Pullback ” to happen before jumping in.

And for this trend strategy to be effective , all these 3 aspects must be present

Let me show You ( with illustrations ) to help You better understand below :

The stock counter that I actually traded using this strategy is the Columbia Laboratories ( CBRX ).

When I look at the CBRX chart on 3rd Dec, the Price has already Break-Out …..& has exploded quite a distance away.

Like this :

Trend Riding Stock Trading Strategies

As You can see from the picture above too..

This stock has been in a very ” tight ” sidebar market for  a period of 2 -3 days since..

And in Dec 3rd, it finally BREAKOUT to the upside.

From the price of $1.33 …..it exploded to $1.50.

That is already a 17 cents move.

So upon spotting this Break-Out, I know this is one counter I can monitor to see if  the other 2 elements would show or not.

But like I said, I do not jump in straight upon seeing such explosive Breakout.

That is too risky.

I would rather weigh the risk first before committing into a position.

In other words, I would rather be more patience and MISSED a trade…

Than to jump in due to IMPULSE and then feeling fearful and sense of regret.

So what am I waiting for before deciding whether to go LONG / Buy this counter or not ?

Well….I am waiting for a Price Pull-Back

I would normally use 2 EMAs ( Period 20 & 50 ) plotted on my chart.

So I would wait for the price to at least ” Pullback ” to the 20 EMAs in order to commit to this position.

Here’s an illustration to show the ” Price Pull-back ” I am waiting for  ( as well as the entry & stop loss ) :

Trend Riding Stock Trading Strategies

Once the price Pull-back to the EMA 20 ( green )….it is a good time to make my first entry to BUY.

But that’s not good enough.

I would still wait for the price to Start Climbing at least..

And I ended up making my BUY order at around the price of $1.47

With the Stop – Loss placing slightly below the EMA50 ( red ) at the price of $1.40

That’s a 7 cents risk.

Indeed a very good risk here to play with…….. considering this counter has exploded and the future rewards could be HUGE.

In order for me to ride such explosive trend for maximum profits…

I use a partial lots strategy to secure my profits as the trade goes my way.

I  set my first profit target at $1.65 .

( which is about 2.5x my risks )

And then another separate lots to ride the trend to the max.

( with the 20 EMA crossing below the 50 EMA  as my exit signals )

So how did this trade of mine turns out ?

Here’s the results:

Trend Riding Stock Trading Strategies

As You can see above too.

The first profit target of $1.65 was hit soon after the next trading day started. ( with a GAP UP )

This 1st partial lots made about $0.18 per unit  ( excluding commissions )

The 2nd partial lots was exited at around the price of $1.77 – When the price closed ” below ” the 50 EMA.

This 2nd partial lots made $0.30  ( excluding commissions )

I entered 10 lots each for both the 1st & 2nd partial exits..

So how much Profits do I make in total using this stock trading strategies then ?

—————————————————————————-

Here are the earnings screenshots to share :

—————————————————————————-

( 1st partial lots profits )

(2nd partial exit profits )

I am using a internet trading platform so that commissions incurred are pretty low.

After deducting the commissions, the total profits for this trade made me about Usd $4,780+ .

——————————————————————————————————————–

This trend riding strategy is indeed very effective & profitable for trading the stock market.

Especially when we are scanning for an ” explosive ” movements that is about to happen ( or at least just happened ) in the market.

If You have been trading the stock market for awhile now, You would also agree that any moves with a HUGE Volume would tend to more reliable….

Agree on that right ?

So if combining a breakout with a ” Price Pullback “…..isn’t that makes a ” Low Risk….yet HIGH REWARDS “ trading opportunity ?

Alright….so much for this stock trading strategy for riding a trend.

I hope You have learn something valuable from it too just like the many other  traders who visited my stock trading strategies blog.

Practice it…..and master it…….soon You will be making very good improvements in Your tradings too.

And of course, the profits You will be enjoying would be much more then !

Happy Stock Trading !

To Your Stock Trading Success,

- Bruce Ho ( author )

Posted in Stock Trading Strategies | 106 Comments »