Disclaimers: - No communication should be considered as financial or trading advice. - All information in this lecture/course/seminar are intended and solely for educational purpose only. - They do not constitute investment advice in any manner whatsoever or have any regard to the specific investment objectives, financial situation or individual needs of any particular persons receiving them. - Examples are used for illustrative purposes only and do not constitute investment advice.
Base on 15th Jan closing, price is closing up to the Resistance level or Supply zone....
How to know if the future break out will be genuine or fake?
There is a way to know by careful study of the current trend and price action.
Let's see how will this break out pent out before I share what you should look out for.
The above scenario is based on worst case when a stock was purchased at the highest point 0f $0.39
where it started to trade to the downside. This illustration is subjective to interpretation, it takes
guts and years of trading skills to perform the recovery, you are not to average down as the stock
price goes lower which is what most unskilled traders will do.
In fact, the best loss is the initial cut loss level that you have set before you enter the market to
buy.
But If you have overlooked or assumed that you just need to "buy and forget" then you will be
very sorry soon.
IN order to reduce the losses, there are steps to be taken to make sure that recovery is possible, you
need to identify that the stock is longer going lower and started to move sideway, as the stock starts
to move up the trend, you make the 1st recovery purchased as shown on 9th April when you see a
bullish Green bar (almost closed near day high), the quantity to buy has to be 3 times higher than the
initial lots size. Subsequently, as the price move higher, execute the 2nd recovery purchased as shown
on 6th May at $0.26 with 3 times higher than the initial lots size.
By averaging up the price, you will have a positive outcome as shown below.
Other ways to recover losses in a trade.
1) If there is stock call or put option (warrants) to buy as a protection insurance.
2) Trade another stock which is trending up or down. Trade in the direction of trend to generate
profits to cover the losses from the losing trade.
3) To apply what I have shared in this blog, average up when the stock starts to recover.
You are the master of your own habits and trading techniques, find your own way to resolve the situation back to health.
Don't sit on it.
You will be better off doing something with small and calculated steps towards recovering from losses.
Happy Profitable Trading 2020
Welcome 2021 with massive action.
Refer to the blog link below, showed the buying of SIA as its fell and started to recover...
How I decided to take trade is no coincidence, it needed effort to study the market as a whole and understood what could turn out for SIA if the Covid situation can be contained with promising vaccine soon and what the chart can tell you a story if we are moving towards a more positive outcome or never.
With three moving averages, you can trend trade the stock.
What you need to know are below:
1) When to enter a trade long or short?
2) When to continue to add lots as price trend higher?
3) When to take partial profits when price trend too far away?
4) When to sell everything and be happy?
5) Scan another potential stock and repeat Step 1 to 4 again.
Hmm...trading is boring boring and routine and routine...
For beginners who just starting to trade. You need to be in the trades in order to learn.
By starting small and accumulate as the price heading up the trend, monitor the cut loss level per entry.
Hopefully over the time, the 1000 shares will become 10000, 100000 and etcs with confidence built up over the time.
