After 10 years of trading,I only trust these 2 indicators.#stocks #stockmarket #makemoney #invest #stockstobuy
@mr.bull.1Transcript
There are hundreds of technical indicators out there. I've tested most of them and after 10 years of trading, I keep coming back to two. The 50-day moving average and the 200-day moving average. Simple, unglamerous, and more effective than any complicated system I've tried. The 50-day MA tells you the medium-term trend. It's fast enough to react to actual price changes, but slow enough to filter out the noise. When prices above the 50-day, the medium-term trend is up. When prices below it, the trend is under pressure. The 200-day moving average tells you the long-term trend. This is the line that institutional investors with the big funds that move markets actually care about. When the S&P 500 is above the 200-day moving average, long-term funds are generally comfortable being invested. When it drops below, many systematic funds are required to reduce their exposure. Here's my actual framework. First, I use the 200-day to define the environment. Above the 200-day moving average, I'm predominantly a buyer. I'm looking for dips to get long, not for reasons to be short. Below the 200-day, I'm cautious. I still take long trades, but with smaller size and tighter stops. Second, I use the 50-day as my trigger line. When price crosses above the 50-day moving average and the 50-day is above the 200-day, that's called a golden cross setup. Not a guarantee, but it's the highest probability, long environment. The inverse price crossing below the 50-day and 50-day below the 200-day is a death cross environment, time to get defensive. Third, and this is the most actionable part, I use pullbacks to the 50-day moving average as entry zones. When a stock isn't a clear uptrend, it doesn't go straight up, it pulls back to the 50-day line, bounces, and continues higher. If you can learn to buy at that exact zone instead of chasing new highs, your entry price improves dramatically. I set a mental stop at 8% below my entry if I'm buying a pullback to the 50-day. If the stock breaks below the 50-day and can't recover within a few days, that's my signal to exit and reassess. The trend has changed. The beauty of the system is that it keeps you out of the market's biggest declines. In 2022, when the S&P 500 dropped below the 200-day moving average and stayed there for months, a strict 200-day rule would have kept you out of the worst of it. Yes, you would have missed some false breakouts, but you would have avoided the 25% drawdown that actually happened. No indicator is perfect. Moving averages are lagging. By the time they give a signal, a significant portion of the move has already happened, but the 5200 system is less about predicting and more about discipline. It keeps you aligned with the trend, it keeps you from fighting the tape and forces you to take profits when the long-term trend breaks. If you're new to trading, start here. Master these two lines before you ever touch another indicator. Want to learn more real-time trading strategies and market analysis? Follow our account and send us a direct message. Our team and professional analyst shares daily trade setups, real-time alerts, and personalized portfolio guidance you won't find anywhere else. Don't trade alone. Let us help you trade smarter.
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