Thread by @RD_Equity

Long Thread - #Booksummary

Here is the summary of my favorite 📖 book "Secrets for profiting in bull 📈 and bear📉 markets - By Stan Weinstein"

Tagging for feedback @Wealth_Theory @MarketScientist @AnyBodyCanFly @Rishikesh_ADX @AmitabhJha3 and reach

🙏

This book influenced me to change my trading strategy upside down from Short term to long term trading. Let see why..🤔 hope this thread will help you/your followers in some way.

🌈Lets get acquainted with some basics/Rules
⚡️First Check market indicators for overall direction
⚡️Scan the industry groups to know which one to zero in
⚡️Shortlist the stocks which have most potentially profitable formation within the favorable groups

⚡️Buying should be done in continuation-type buy patterns that are already in Stage 2
⚡️Never sell a stock in Stages 1 or specially in stage 2
⚡️Never buy a stock in Stages 3 or specially in stage 4

📌we will talk about chart stages little later

⚡️Never guess a bottom (and go long)
⚡️Always trade in harmony with the market – buy Stage 2 strength; sell Stage 4 weakness
⚡️if there is conflict between price volume action and the earnings, always go with objective technical approach
💫Most important always be consistent and

⚡️Keep a log of your trades mentioning the reason for the trade and analyze actions time to time

🌈Chart reading
As per Stan daily charts are for very short term traders, weekly for intermediate (several months) traders and monthly for very long term (multi-years trends)

📌In this book Stan focused on weekly charts for intermediate trend which can last for several months or sometime for years

⚡️One should Look at sharp price spikes – forming pattern with give insight into next major move

⚡️One should look at volumes – it is very important that volume is large and expanding on breakout

⚡️One should look at 30 week MA – never long if Price below declining 30-week MA; never short if Price above rising 30 week MA

⚡️one should be aware of its long-range background (yearly high-low, long-term support/resistance)

⚡️one should also look at its relative-strength line – long on uptrend, short on downtrend; watch those situations where it shifts direction

🌈Let study the stages of the chart

🥇Stage 1: basing area or consolidation, its the sideways trend after several months of decline.
⚡️In this stage volume decreases and often starts expanding towards end stage 1
⚡️30 weekly MA begins to flatten out

🥈Stage 2: advancing phase - this is the ideal time to go long when stock Breaks out of stage 1 into stage 2
⚡️Breakout above resistance zone and 30-week MA should happen with increased volume
⚡️Initial rally after BO, stock should at least give one pullback to the BO levels

⚡️Smaller the pullback, stronger 💪the stock
⚡️In stage 2, 30week MA usually starts moving up shortly after breakout
⚡️Here price moves two steps forward and one sharp 👞step back – it should be okay as long as price is above 30 week MA.

⚡️When the angle of ascent of MA slows down and flattens and prices get closer and closer to MA, stock becomes a hold

🥉Stage 3: Making Top/Consolidation

⚡️In this stage upward move loses momentum and stock starts trending sideways

⚡️Volume are usually heavy and moves are sharp and choppy
⚡️Prices flirts below and above 30 Week MA on declines and rallies
⚡️In this stage most important is to keep emotions in check

🏅Stage 4: declining phase. Stock breaks below bottom of support zone, stock is become Sell

🌈So WHEN TO BUY
📌When stock moves out of Stage 1 and enters Stage 2. Here risk is extremely low (support just beneath purchase price) and an excellent upside potential (entire Stage 2 advance lies ahead), but need patience as it can take time for solid Stage 2 momentum to build

📌After Stage 2 is well underway, when stock drops back close to its 30W MA and consolidates. MA should still be clearly trending higher. It then breaks out to a new high on top of resistance zone – 📈this is continuation buy

🌈There are few chart patterns which are extremely profitable in conjunction with the rules above.

⚡️Head and Shoulder
⚡️Double Bottom

Here bigger the base, the bigger the move

🌈When do we SELL
⚡️After you buy a break out
👉Don’t average down in a negative situation
👉Don’t refuse to sell because the overall market trend is bullish
👉Don’t wait for the next rally to sell
👉One should always have protective stop-loss.

👉When setting initial stop, pay less attention to 30 week MA and more to prior correction low
👉Place it below round number
👉After buy on BO, place stop-loss below lower end of base
👉When trending up, give it plenty of room and raise the SL after each correction is done

👉At stage 3, become more aggressive with stop-loss
👉Do not wait for 30 week MA to be violated before selling
👉Use trend-lines to lock more profits,Sell at least part position when trend-line is violated

👉Once in a while, after entry stock reverses, once it is at the Stop-loss level, take a loss and consider it a cost of doing business and learning and say thanks for training 🙏

Here is an example of the stages on Infy's Chart

There are lot many concepts in this book but its difficult to explain in this thread. May be some other time and Separate tweet thread.

Thanks for reading 🙏 I hope you enjoyed reading the thread. RT if you liked it for better reach

Many People are asking about this book. you can purchase this book from Amazon.. Here is the link
amzn.to/3h2LyDZ

@blazingbhat just saw you are also Stan Weinstein fan