Home Trading Strategies Stock Trading: Proven Techniques to Beat the Markets

Stock Trading: Proven Techniques to Beat the Markets

Stock Trading: Proven Techniques to Beat the Markets

hey hey what’s my friend so in today’s episode right I want to share with you some of the market behavior right of the stock market this is something that you know most traders are not aware of because they think you know all markets are the same but hey that’s not true right different markets they have different so-called characteristics and in today’s episode let me share with you a few techniques right there you can use right to trade the stock markets based on me yeah its own behavior number one you want to buy string right when it comes to stop trading because right research has shown right academy research even my own back testing has shown that stocks that has performed well recently for example stocks ted has a move the most right over the last 12 months these are the type of stocks right they would tend to continue to outperform the market in the near future so you’re gonna buy string right in stock trading in other words you’re gonna buy high and sell higher okay number two I mean stop trading right you want to also use a trend filter okay because the stock market is it’s very interesting because the stock markets they always have an index right that tracks what the overall stock market is doing for example SMP 500 it tracks the largest 500 companies in the u.

s. so if the SMP 500 is in a bull market you can be sure that most stocks right would tend to be in a bull market as well in an uptrend but if the SMP 500 is in a downtrend then most stocks right you know you will go down along with it so how can you use this in your trading very simple right what you can do is adopt a trend filter for example if the SMP 500 is above the 200-day moving average then you can take it as like a green light you have a permission to buy stocks right since the overall market is in an uptrend but if the SMP 500 let’s say it’s below the 200-day moving average right means you know the stock market isn’t doing too well then you don’t be buying stocks you would run a whole long to cash right since you know most stocks doing the point of time right then to be you know falling day after day week after week okay so this is a simple trend filter that you can use to know when you should be buying stocks and when it’s better to hold on to cash number three a relative strength right so you can use relative strength in in stock trading right because it’s a technique right to have you identify which are the strongest stocks to trick for example let’s say the S&P 500 as you know he did a pullback of 20% okay any notice right at this particular stop let’s say stop stop orange right it’s this storage right didn’t really make much of a pullback the SP pullback 20% but stop orange maybe you know just pullback 1% 2% you know around breakeven so this right tells you that stop orange right it’s a sign of strength right because when the index makes a pullback this stop orange still Hoover and the the initial price that he was at right prior to the index making a pullback so you can explain if the index recover this particular stock let’s say stop orange right there’s a good chance that it would even you know break out of the highest first right hand to move even further I higher right compared to the S&P 500 because in terms of relative strength this stock orange right it’s stronger than the index okay so you can use relative strength in your own trading to identify know which stocks are the stronger ones and those are the ones that you want to trade so the key thing when you’re using relative strain the easiest way to do it is watch right when the market does a pullback reach stocks are the one that holds up really well which are the stocks that you know the pullback doesn’t really affect those stocks or rather those stocks still continues to consolidate or even continue to break up to new highs those are the stocks that you want to pay attention to as they will continue to outperform the market in the in the near future and finally right the fourth thing is when it comes to stock trading you want to avoid shorting the markets right and and here’s why so in the stock markets right if you look at from its inception to where it is right now almost all the stock markets I think all of them they are in an uptrend in a long-term uptrend those they are no longer in a long-term uptrend are probably delisted okay so generally you can see that stocks right it goes up in the long run so when you’re trying to short stocks right you are putting yourself at a disadvantage right because you know that in the long term right the trend is up so that’s the first reason second reason is that stops right in the in a downturn right it behaves very differently in an uptrend when stocks are collapsing during a reception recession that the price or it can drop collapsed after a huge bearish candle but at the same time right there something called a dead cat bounce right where you see the rally after a strong collapse it’s also equally strong back in the opposite direction for example the with online financial crisis you can see the v-shaped bottom right so stocks are exhibit this behavior in downturn right in bear markets right the price can drop very fast and the same time rarely the pullback is equally shot towards the opposite direction so when you’re shorting stocks right and if you’re trying to shut stocks and you hold on your traits too long you realize that all your open profits are quickly eroded so for inexperienced traders I recommend that you stay away from shorting stocks right if you wanna short stocks do it only if you’re experienced that you know what to expect when you’re shorting the markets right but for new traders avoid shorting stocks right because number one overall market is in a long-term uptrend and number two right the pullback is very fast and quick right and if you’re not you know fast enough to react right you will lose your profits very quickly as well okay so this are the four techniques right I want to share with you about the stock markets right the behavior of the stock market and hopefully you can use it for your own trading and with that’s it I have come towards the end of today’s session if you enjoyed it smash the thumbs up button subscribe to my youtube channel the button is below click subscribe and I will talk to you soon you


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