A 200-day moving average (200MA) is a line on a chart that shows the average closing price of a stock over the last 200 trading days
Above the 200MA - enter into positions
Below the 200MA - we stay away
Using the 200 day and trendlines for entries and exits
Buy/Long Above the clouds
Sell/Short Below the clouds
Momentum shows us the amount of buyers and sellers in the market
Momentum will often reach exhaustion, when sellers do not want to sell anymore or when buyers no longer want to buy anymore.
By comparing momentum and price, we can find the best entries for our trade
Use Momentum Crossings at Support and Resistance to guide your trading
Cross up in momentum at Support = Entry
Cross Down in momentum at Resistance = Exit
Compare Momentum Crossing to Price Pivots
Price is Rising, Momentum is Falling
Price is Falling, Momentum is Rising
Qualify trades with stacked moving averages
Primary 20, 50, 200; some use 10, 20, 50, 150, 200
50 Crossing above 200 = Golden Cross (Long)
50 crossing below 200 = Death Cross (Short/Avoid)
Really great explanation of understanding structure and identifying changes in direction
Identifies potential change in market direction
Credit to Callisto Fx
Break in Structure
Change of Character
Using larger time frames pivots vs shorter time frame pivots
Determine Risk:Reward Ratio
Calculate Max Position
Calculate Max Risk
Determine the number of share to purchase/sell
This concept looks to target market bottom reversals
When the S&P 500, Nasdaq 100, Russell 1000/3000 has a 'Follow Through Day' you want to consider entering into positions in the indices or specific stocks.
They do not need to be large positions, but this is where we can find the lowest risk for entry and potential for the greatest gains.
See more information and examples here (Follow Through Day)
Find value in the market by using the Golden Ratio
At All Time Highs, 80% of stocks will fall 50% and 50% of stocks will fall 80%
We want to target strong companies at the 50% level
Use the fibonacci tool to find the golden ratio and learn to play a retest out of that zone
How to use Finviz.com
How to find stocks based on sector performance
How to find stocks based on an index
Looking through charts to find ones that fit our trading strategy
Identifying Leaders - stocks within an index that trends before the index
Identifying Laggards - stocks that do not trend with the index and may often trend later
In-Line Stocks - stocks that trend with the entire index
Identifying an index trend to target In-Line stocks for better returns