At TraderLion, we identify an uptrend as stocks/markets that trade ABOVE a RISING 21DSMA and 50DSMA.
A downtrend occurs when stocks/markets trade BELOW a downsloping 21DSMA/50DSMA.
Let's look at an example 👇
4 Simple Steps to Avoid Downtrends 📉 (a thread)
🧵
At TraderLion, we identify an uptrend as stocks/markets that trade ABOVE a RISING 21DSMA and 50DSMA.
A downtrend occurs when stocks/markets trade BELOW a downsloping 21DSMA/50DSMA.
Let's look at an example 👇
Swing Traders: when markets/stocks are above the rising 21D
Position Traders: when market/stocks are above the rising 50D
We can take this one step further by understanding what a Power Trend is 💪
✅ Low > 21ema for past 10 sessions
✅ 21EMA > 50SMA for at least 5 sessions
✅ 50SMA slope is positive
✅ Market closes up
This is a key component to avoiding downtrends and losing money altogether.
Our most recent follow through day is a great example of how NOT having clear leadership groups leads to quick failures of uptrends.
If the rally itself isn't broad, it is hard to sustain!
The groups that stoodout the most were Software & Electric Vehicles 👇
$NET $TWLO $TSLA $BLNK
$PINS $SNAP
Tracking if your recent trades were winners/losers/breakeven allows you to see if what you are doing is working on a net basis.
If you last 10 trades have all been winners or breakevens, you are in a strong environment.
Ultimately this step is the most important because this directly relates to your hard earned money.
If you DO want to develop a feel for trading a corrective market, SIZE DOWN.
1/8 of your normal size should allow you to do this without hurting you in a big way.
Traders overlook the importance of MC while we are focused on the pursuit of maximizing our Equity Curves.
We can't do one w/o the other!
If you want more similar content, please follow us @TraderLion_
Let us know what your best trick is to avoiding downtrends 🔽
More from TraderLion 🦁
The market’s best investors have made millions from the simple saying:
“Buy right, sit tight”
Sounds simple - but what does “buying right” even mean?
Use TraderLion's 10-Step Ultimate Guide to buying right 👇
By the end of this thread, you'll know how to:
1. Build an objective list of buy criteria
2. Have 10+ real world examples to study
3. Increase your win rate.
4. Increase your profitability
Let's dive in!
Buy Rule #1: The General market must be in an uptrend.
3 out of every 4 stocks follow the market trend both to the upside and to the downside.
This means that if you are buying a breakout in a downtrend, it already has a 75% chance of failing!
It doesn't matter if the stock is in a leading group with an impressive RS line and strong fundamental story.
At the end of the day, market direction is the MOST important factor!
Here's an excerpt from How To Make Money In Stocks by stock market legend William O'Neil:
Here's another video by @richardmoglen that will help you determine if the stock market is in a downtrend:
https://t.co/shD5OjkP6s
Let's move on to #2.
“Buy right, sit tight”
Sounds simple - but what does “buying right” even mean?
Use TraderLion's 10-Step Ultimate Guide to buying right 👇
By the end of this thread, you'll know how to:
1. Build an objective list of buy criteria
2. Have 10+ real world examples to study
3. Increase your win rate.
4. Increase your profitability
Let's dive in!
Buy Rule #1: The General market must be in an uptrend.
3 out of every 4 stocks follow the market trend both to the upside and to the downside.
This means that if you are buying a breakout in a downtrend, it already has a 75% chance of failing!
It doesn't matter if the stock is in a leading group with an impressive RS line and strong fundamental story.
At the end of the day, market direction is the MOST important factor!
Here's an excerpt from How To Make Money In Stocks by stock market legend William O'Neil:
Here's another video by @richardmoglen that will help you determine if the stock market is in a downtrend:
https://t.co/shD5OjkP6s
Let's move on to #2.
More from Traderlion
The market’s best investors have made millions from the simple saying:
“Buy right, sit tight”
Sounds simple - but what does “buying right” even mean?
Use TraderLion's 10-Step Ultimate Guide to buying right 👇
By the end of this thread, you'll know how to:
1. Build an objective list of buy criteria
2. Have 10+ real world examples to study
3. Increase your win rate.
4. Increase your profitability
Let's dive in!
Buy Rule #1: The General market must be in an uptrend.
3 out of every 4 stocks follow the market trend both to the upside and to the downside.
This means that if you are buying a breakout in a downtrend, it already has a 75% chance of failing!
It doesn't matter if the stock is in a leading group with an impressive RS line and strong fundamental story.
At the end of the day, market direction is the MOST important factor!
Here's an excerpt from How To Make Money In Stocks by stock market legend William O'Neil:
Here's another video by @richardmoglen that will help you determine if the stock market is in a downtrend:
https://t.co/shD5OjkP6s
Let's move on to #2.
“Buy right, sit tight”
Sounds simple - but what does “buying right” even mean?
Use TraderLion's 10-Step Ultimate Guide to buying right 👇
By the end of this thread, you'll know how to:
1. Build an objective list of buy criteria
2. Have 10+ real world examples to study
3. Increase your win rate.
4. Increase your profitability
Let's dive in!
Buy Rule #1: The General market must be in an uptrend.
3 out of every 4 stocks follow the market trend both to the upside and to the downside.
This means that if you are buying a breakout in a downtrend, it already has a 75% chance of failing!
It doesn't matter if the stock is in a leading group with an impressive RS line and strong fundamental story.
At the end of the day, market direction is the MOST important factor!
Here's an excerpt from How To Make Money In Stocks by stock market legend William O'Neil:
Here's another video by @richardmoglen that will help you determine if the stock market is in a downtrend:
https://t.co/shD5OjkP6s
Let's move on to #2.
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1/ Some initial thoughts on personal moats:
Like company moats, your personal moat should be a competitive advantage that is not only durable—it should also compound over time.
Characteristics of a personal moat below:
2/ Like a company moat, you want to build career capital while you sleep.
As Andrew Chen noted:
3/ You don’t want to build a competitive advantage that is fleeting or that will get commoditized
Things that might get commoditized over time (some longer than
4/ Before the arrival of recorded music, what used to be scarce was the actual music itself — required an in-person artist.
After recorded music, the music itself became abundant and what became scarce was curation, distribution, and self space.
5/ Similarly, in careers, what used to be (more) scarce were things like ideas, money, and exclusive relationships.
In the internet economy, what has become scarce are things like specific knowledge, rare & valuable skills, and great reputations.
Like company moats, your personal moat should be a competitive advantage that is not only durable—it should also compound over time.
Characteristics of a personal moat below:
I'm increasingly interested in the idea of "personal moats" in the context of careers.
— Erik Torenberg (@eriktorenberg) November 22, 2018
Moats should be:
- Hard to learn and hard to do (but perhaps easier for you)
- Skills that are rare and valuable
- Legible
- Compounding over time
- Unique to your own talents & interests https://t.co/bB3k1YcH5b
2/ Like a company moat, you want to build career capital while you sleep.
As Andrew Chen noted:
People talk about \u201cpassive income\u201d a lot but not about \u201cpassive social capital\u201d or \u201cpassive networking\u201d or \u201cpassive knowledge gaining\u201d but that\u2019s what you can architect if you have a thing and it grows over time without intensive constant effort to sustain it
— Andrew Chen (@andrewchen) November 22, 2018
3/ You don’t want to build a competitive advantage that is fleeting or that will get commoditized
Things that might get commoditized over time (some longer than
Things that look like moats but likely aren\u2019t or may fade:
— Erik Torenberg (@eriktorenberg) November 22, 2018
- Proprietary networks
- Being something other than one of the best at any tournament style-game
- Many "awards"
- Twitter followers or general reach without "respect"
- Anything that depends on information asymmetry https://t.co/abjxesVIh9
4/ Before the arrival of recorded music, what used to be scarce was the actual music itself — required an in-person artist.
After recorded music, the music itself became abundant and what became scarce was curation, distribution, and self space.
5/ Similarly, in careers, what used to be (more) scarce were things like ideas, money, and exclusive relationships.
In the internet economy, what has become scarce are things like specific knowledge, rare & valuable skills, and great reputations.
Fake chats claiming to be from the Irish African community are being disseminated by the far right in order to suggest that violence is imminent from #BLM supporters. This is straight out of the QAnon and Proud Boys playbook. Spread the word. Protest safely. #georgenkencho
There is co-ordination across the far right in Ireland now to stir both left and right in the hopes of creating a race war. Think critically! Fascists see the tragic killing of #georgenkencho, the grief of his community and pending investigation as a flashpoint for action.
Across Telegram, Twitter and Facebook disinformation is being peddled on the back of these tragic events. From false photographs to the tactics ofwhite supremacy, the far right is clumsily trying to drive hate against minority groups and figureheads.
Declan Ganley’s Burkean group and the incel wing of National Party (Gearóid Murphy, Mick O’Keeffe & Co.) as well as all the usuals are concerted in their efforts to demonstrate their white supremacist cred. The quiet parts are today being said out loud.
The best thing you can do is challenge disinformation and report posts where engagement isn’t appropriate. Many of these are blatantly racist posts designed to drive recruitment to NP and other Nationalist groups. By all means protest but stay safe.
There is co-ordination across the far right in Ireland now to stir both left and right in the hopes of creating a race war. Think critically! Fascists see the tragic killing of #georgenkencho, the grief of his community and pending investigation as a flashpoint for action.
Across Telegram, Twitter and Facebook disinformation is being peddled on the back of these tragic events. From false photographs to the tactics ofwhite supremacy, the far right is clumsily trying to drive hate against minority groups and figureheads.
Be aware, the images the #farright are sharing in the hopes of starting a race war, are not of the SPAR employee that was punched. They\u2019re older photos of a Everton fan. Be aware of the information you\u2019re sharing and that it may be false. Always #factcheck #GeorgeNkencho pic.twitter.com/4c9w4CMk5h
— antifa.drone (@antifa_drone) December 31, 2020
Declan Ganley’s Burkean group and the incel wing of National Party (Gearóid Murphy, Mick O’Keeffe & Co.) as well as all the usuals are concerted in their efforts to demonstrate their white supremacist cred. The quiet parts are today being said out loud.
There is a concerted effort in far-right Telegram groups to try and incite violence on street by targetting people for racist online abuse following the killing of George Nkencho
— Mark Malone (@soundmigration) January 1, 2021
This follows on and is part of a misinformation campaign to polarise communities at this time.
The best thing you can do is challenge disinformation and report posts where engagement isn’t appropriate. Many of these are blatantly racist posts designed to drive recruitment to NP and other Nationalist groups. By all means protest but stay safe.
