Stock Market Investing Ultimate Guide by Ryan Miles

Author:Ryan Miles
Language: eng
Format: epub
Tags: stock investing, stock market investing, stock trading, forex trading, options trading, online trading, investment and strategies, stock trading strategies, passive incomes, online business, real estate, stock market investing for beginners, how to start a small business, advanced trading tools, trading strategies, technical analysis investment, guide step by step, dividends investing, etf, home based small business, small business, Investment Analysis & Strategy
Publisher: PIERLUIGI MUTO
Published: 2020-10-13T00:00:00+00:00

The buy point can be looked at as the ground floor of a building where an elevator is about to rise to new highs. You do not only buy the right stock at the right price but also at the right time.

Cup with Handle Pattern

One of the most powerful patterns that allow consistency with stock purchase is the cup with handle pattern. This is the point where you buy a stock at its lowest price and is likely to rise very fast. Human nature is still the same where traders and other players in the markets exhibit either greed or fear.

What is the Buy Point?

This is defined as the price level where a stock is very likely to rise significantly. The buy point, also known as an entry point, is a point in the chart that offers the least resistance to price increase.

Example

Cup without a handle is an approach that has worked over centuries. It is still believed to, among the most successful strategies, for determining entry points. Let us take a stock that has seen its price decline by up to 33%. This is after a successful upward trend that showcased an all-time high.

However, for 6 weeks, the stock starts to decline. However, once the decline is over and the upward trend begins, there are no signs of a major pullback. At this level, the entry point is pretty simple to determine. It is identified to be 10 cents on top of the peak towards the left-hand side. As soon as the stock recovers and gains 10 cents on top of the previous highest level, it’s at this point that you enter the trade.

Past price a reliable indicator of future performance

Traders understand basically that past price action of a stock and most other securities can help to accurately predict the future performance of the same stock. This is why traders are always researching and analyzing past performance of various securities.

There are lots of other finance experts who rely on technical analysis and not just swing traders. We have analysts, investors, mutual fund managers, finance companies and others who use fundamental analysis followed by technical analysis thereafter. Technical analysis enables all these experts to narrow down to reliable, minimal risk entry price levels.

Charting varying time frames

Future price movement is accurately predicted using charts. There are different kinds of charts available with respect to a single security. There is the 5-minute chart and the 15-minute chart then there are the 1-hour and the 4-hour charts and finally the daily chart.

There are primarily two variables at play when it comes to charting and technical analysis. These are the particular technical indicators and the time frames mentioned above. The timeframe chosen by traders often reflects their personal trading style preferences. We have different kinds of traders from intra-day traders, to day traders, swing traders, long-term traders, and investors among others.

How to Read Charts

There are numerous types of stock charts. Examples of these charts include candlestick charts, line charts, point-and-figure, open-high-low-close charts, bar charts and many others.

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