Skip to main content

Supply and Demand: Big Volume Demand at Key Points – In Detail

Supply and Demand: Big Volume Demand at Key Points – In Detail 1. What is Supply and Demand in the Stock Market? At its core: Supply = Sellers (people who want to sell a stock) Demand = Buyers (people who want to buy a stock) The interaction between supply and demand determines price movement: If demand > supply → price goes up (buyers compete, pushing prices higher). If supply > demand → price goes down (sellers undercut each other, lowering prices). 2. Supply and Demand Zones These zones are areas on a chart where the price had a strong reaction in the past, indicating high supply or demand. Demand Zone (Support) A price area where buying pressure exceeded selling pressure. Price drops into this area and bounces upward. Often seen with long wicks, strong green candles, or volume spikes. Example: A stock falls to $100, then suddenly reverses to $120. The $95–$100 zone is a demand zone. Supply Zone (Resistance) A price area where selling pressure exceeded buying pressure. Price r...
Post a Comment

Stock trading secret

the 5 stages of profitable trading and how you can quickly level up from one stage to the next

Let’s go…

​


1: Hyper newbie stage

At this stage, you have less than 1 year of experience and heard about the riches trading can bring.

You have thoughts of trading for a living. Or, think you can take a small account and turn it into 6 or 7 Figures. As you can tell, your expectations are out of whack.

(It’s like saying you can be an F1 driver after taking a few driving lessons.)

Clearly, it’s not going to happen because you’ll lose it all in a matter of months.

After blowing up multiple accounts, you realize the need for sound risk management and you move on to the next stage…

​

2: Risk manager

Now, you understand the importance of risk management. You can risk a fraction of your capital on each trade such that even if a trade hits your stop loss, the loss is only an “ant bite” to your account.

Then, you learn about the risk-to-reward ratio, aiming for a minimum of 1 to 2 risk-reward ratio before placing a trade.

However, the losses cause you to suffer death by a thousand cuts and your account value is heading lower. That’s when you realize there’s more to it than just risk management and risk-to-reward ratio…

​

3: Lone ranger

At this stage, you have a few years of trading experience. You have studied lots of trading materials like candlestick patterns, support and resistance, MACD, RSI, Stochastic, Fibonacci, etc. But still, your trading results aren’t improving. Why?

That’s because you don’t have an edge in the markets. In other words, you don’t have a proven trading strategy that works.

To find an edge in the markets, you must either backtest or forward-test your trading system. This way, you can find out whether your trading system works or not.

Many traders will attempt and fail. Most will give up on trading entirely. But for the few that make it, you move on to the next stage…

​

4: Profitable trader

Congratulations! This is a significant milestone because you’re in the top 5% of traders.

You have a proven trading system that works and your trading account has grown in value over the last 12 months.

However, when market conditions change, your trading system underperforms and you’ll have to ride out the drawdown. Depending on your trading system, the drawdown could last for months or even years.

At this point, you realize you need multiple trading systems so you can profit in different market conditions and you move on to the final stage…

​

5: Business owner

At this stage, the goal is to profit in any market conditions and sleep peacefully at night knowing that no matter what the market throws at you, you’re covered.

This is where you develop new trading systems so you can profit in a bull market, bear market, or even a choppy market.

The journey is never-ending as you develop new trading systems and source new funds to add to your trading business.

And that’s it, the 5 stages of profitable trading!

​

Comments

Post a Comment

Popular posts from this blog

How to draw support and resistance levels in the stock market

 How to Draw Support and Resistance Levels in the Stock Market   Drawing support and resistance (S&R) levels correctly is crucial for technical analysis. Here’s a detailed step-by-step guide to help you: Step 1: Identify Key Price Levels Open a candlestick chart for the stock. Look for price levels where the stock has reversed multiple times. Support:  Areas where the price bounces up. Resistance:  Areas where the price gets rejected and moves down.   Step 2: Use Different Methods to Find S&R 1. Horizontal Support & Resistance Find the price points where the stock repeatedly stops and reverses. Draw horizontal lines at these levels. Example:  If a stock reversed at $100 multiple times, it’s a strong level. 2. Trendline Support & Resistance Connect higher lows for an uptrend support line. Connect lower highs for a downtrend resistance line. These lines show the stock’s trend direction. 3. Moving Averages as Dynamic S&R Use indicators like...
Post a Comment
Read more

America's greatest stocks picking secrets in details?

America's greatest stocks picking secrets in details?  The art of picking great stocks in America is a combination of disciplined research, strategic analysis, and a bit of market intuition. Here are detailed secrets and strategies that have been used by some of the most successful American investors: 1. Fundamental Analysis: Know the Business Inside Out Warren Buffett’s style is the gold standard here. Key elements: Understand the business model: Can you explain how the company makes money in one sentence? Economic moat:  Does the company have a durable competitive advantage? (e.g., brand, patents, network effects) Strong financials: Consistent revenue and earnings growth High Return on Equity (ROE) and Free Cash Flow Low debt-to-equity ratio 2. Look for Growth at a Reasonable Price (GARP) Peter Lynch’s approach blends value and growth investing. Focus on PEG Ratio (Price/Earnings to Growth): A PEG < 1 may suggest undervaluation. Find “teenagers”: companies with potential ...
Post a Comment
Read more

Trade/Investment Checklist – Cut Losses Without Exception

You can use before, during, and after any trade or investment to help you cut losses without exception.  Trade/Investment Checklist – Cut Losses Without Exception Before Entering the Trade: 1. Do I have a clear thesis? [ ] Why am I buying this? (Fundamental, technical, macro reason) 2. What is my entry price? [ ] Planned buy zone 3. What is my stop-loss level? [ ] % Loss I’m willing to take: _____% [ ] Specific price level: $_____ 4. What is my target price or exit goal? [ ] Risk/Reward ratio is at least 2:1 5. What would make me exit early? [ ] News, earnings miss, technical breakdown, macro shift, etc. During the Trade: 1. Is the price near or below my stop-loss? [ ] YES – Exit immediately 2. Is my thesis still valid? [ ] If NO – Exit 3. Has the asset broken major support/trend line? [ ] If YES – Exit 4. Am I emotional, stubborn, or “hoping”? [ ] If YES – Reassess objectively. Exit if unsure. 5. Is there a better opportunity elsewhere? [ ] If YES – Consider reallocating capital A...
Post a Comment
Read more