Let's face it.
There are lots of secrets out there written by a bunch of people who claim to know all about the stock market. I'm willing to admit I still have lots to learn about the market, but after many years in the market, here are some secrets that will really make you money.
Why would you want to buy stocks that are flat or moving down? Too many people ignore this. I wonder why. Take a look at the two stock charts below. The first one is the weekly chart of Apple. It is in an uptrend and making a 45 degrees angle sloping upwards.
The second stock chart is the weekly chart of National Oilwell Varco. This is just the opposite of Apple. It moves downward and it slopes down -45 degrees. If you think you could bottom fish and buy at $65....
Let's just say its best to buy stocks that are sloping upward 45 degrees.
From the time when stocks were first traded, there are only 4 stages that a stock will ever go through. This principle stands true 100 years ago to this day. The chart below shows Google's daily chart going through stage 1 to stage 4.
Here is the meaning of each stage.
Stage 1 - Stock moves sideways, bottoming (Do nothing)
Stage 2 - Stock in bull market (You buy)
Stage 3 - Stock is at the top (You get out and do nothing)
Stage 4 - Stock in bear market (You don't buy)
In summary, you only buy and make money in Stage 2. If you have been losing money you were either buy at Stage 1, Stage 3 or Stage 4. Got it?
The 200 day moving average is what the pros use to sort out good stocks and bad stocks. Big institutions to this day look at the 200 day moving average and this moving average is perhaps the most powerful MA in the stock market world. For those of you who don't know what an MA is, just google it. Sorry bout that, there are lots of good definitions out there better than I can explain.
You see, stocks are just like little children. Sometimes they behave well and sometimes they are naughty. You only want to reward kids when they behave well. You do the same thing to stocks.
In the chart above, you can see the stock of Google again). The yellow line is the 200 day moving average. When Google is above its 200 day MA, it is well behaved and it moves up. I have circled it green the color of money.
When Google is below its 200 day MA, it is not behaving properly. Look at the steep drops and choppy movements. You certainly don't want to give your money to a naughty kid.
These 3 stock market secrets have helped me made money and avoid lots of losses. The next time you decide to invest or trade a stock, pull out these 3 checklists and see whether your stock fits all the criterias. Yes, you can thank me. Just drop me a message at my FB page. See ya!
Oh...where's number 4 and 5? Well, you know our mind can't digest so much in one go. 3 things to remember is just enough :) Take care and have a nice day!
p.s. every single stock that I analyze and mention in my FB page fits these criteria, for stock ideas to invest or trade, drop by my FB page below.