20 Jul Once-In-A-Decade
July 20, 2022
In 2008, I was scared to death.
The financial world was collapsing and we were 24 hours away from going to our ATM and having nothing come out.
At that time, I didn’t know much about Forex and hadn’t come across trading robots. I was a stock trader without a clear system who was too scared to even think about pressing buttons. Although, being in cash turned out better than 99% of the funds out there.
But I also missed the massive bull run that began in 2009.
I’m not going to let that happen again.
Of course, there’s still a big problem: HOW can we catch big winners when the market turns?
How will we know when to get in? How do we know what to pick? How do we trade it?
We could just buy now and close our eyes for five years. That might work because prices are really low. But that also could lead to losing everything or not making a cent. Let’s try something better.
In this week’s Newsletters, we’ll try to answer those questions. First up: How will we know to get in?
If you study the biggest stock market winners over the past several decades, one crazy thing stands out. They almost all use Weekly charts. Why?
One, Weekly charts are super easy. We barely have to watch the market.
Two, it takes out all the noise.
Three, it allows us to stay in for gargantuan moves.
The other thing best traders do is use a moving average (MA). They trade either an initial break above the MA or take early breakouts when price is already above the MA.
So, back in 2008-2009, all I had to do was wait for basically any stock to stop going down and break above the MA on a Weekly chart. If I did that, I could have done amazingly well.
Wait, is that true?
Let’s take a look. Quick, name a stock you wish you had. You said AAPL (Apple), right?. Everyone says AAPL.
If I had not been a scared little puppy, how would AAPL have done in 2008-09? Spoiler alert: extremely well.
In April 2009, I could have entered AAPL on a break above the MA at $4.35. If I would have traded $10,000 worth of stock, I could have easily ridden that trade all the way up to my exit at $8.60.
That’s a 97% win with absolutely no work whatsoever.
Was that the only stock that moved in 2009 after the Bear Market subsided? No, dozens did the same thing.
And what does AAPL look like now?
It’s been languishing below the MA for most of the year.
But it’s moving back up toward a possible entry.
An entry might be coming very soon. And it could be an opportunity we haven’t seen in quite a while.
In our next Newsletters, I’ll go over the details of this simple system (it can be done manually or with a robot) and look for other big opportunities that might be presenting themselves.
Talk to you soon.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.