This video introduces one of the simplest, yet most profitable trading strategies you will ever find. Not only is the strategy great for big board stocks like AAPL, but it works extremely well on promo stocks like NSRS.
the text that goes with the video:
Remember how we pointed out that support and resistance are established all the time (in this Trading U post)? Stocks establish support and resistance every minute, every hour, every day, every week, every month, every year, etc…
The same concept holds true for uptrends and downtrends (which in essence are simply another form of support and resistance so this would make sense).
uptrends and downtrends are always getting established: every minute, every hour, every day, every week, every month, every year, etc…
Some uptrends only last a few minutes, a few hours, or a few days. Others can last weeks, months, or even years. The same can be said for downtrends.
Depending on the type of strategy you are implementing (extremely short term – day trading), (shortermediate (our word for short term/intermediate term) – some types of swing trading), long term (investing), some downtrends and uptrends carry more weight.
ex:
If you’re day trading, you are more concerned with the trend for that day and while you would consider other trends (like daily or weekly) they wouldn’t be your main focus
If you are holding long term, you are more concerned with the underlying weekly/monthly trend vs. the trend of the last few hours or days
Taking this all into account, we’re going to present what we have found to be a successful for playing uptrends and downtrends:
The concept:
A buy signal is generated when a stock that has previously been downtrending breaks above the prior days high
A sell signal is generated when a stock that has previously been uptrending breaks below the prior days low
- Today’s high (after the market has closed) is always going to be tomorrow’s “prior days high”
- Today’s low (after the market has closed) is always going to be tomorrow’s “prior days low”
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