After a basing/corrective period in the market, new merchandise will start to emerge and show itself as the market is setting up for another uptrend.
Some leaders from the previous run may continue their moves, but often it's the new leaders which will provide the most alpha.
So keep an open mind and search for the stocks that are standing out from the crowd with the strongest combination of superior price + volume action and fundamentals.
📚TraderLion’s Recommending Reading List 📚 (Thread)
⬇️
1. How To Make Money in Stocks - William O’Neil
William J. O'Neil is the founder @IBDinvestors. His #CANSLIM methodology and studies have influenced us at TraderLion & many authors including those in this thread.
Reminiscences is the biography of Jesse Livermore, one of the greatest speculators who ever lived. More than 80 years later, it is still one of the most highly recommended investment books ever written.
Impatience and instant success are built into our minds from the get-go. We want instant wins and instant rewards.
This has as much to do with our psychological build-up as it does with the society we live in.
In this thread, we will cover:
What to do if you are not trading well.
How to stop the drawdowns when no progress is being made.
How to have a systematic process that protects you from yourself.
What to look for when the market gets volatile. (Thread)
↓
The first thing you should be on the lookout for is tight price action in leadership names. During corrective markets, liquidity is low as market participants take a step back due to uncertainty.
This leads to larger price ranges and therefore tight action is a sign that liquidity is returning to the markets.
As certainty returns, price action becomes tighter and more rational.
10 Lessons I Learned While Working With William O’Neil (Thread)
↓
1. The importance of trading psychology and emotional/physical well-being
Trading psychology and physical/emotional well-being is probably one of the least discussed, yet most important aspects of becoming a successful trader.
However, the large majority of traders spend little time if any focusing on this aspect of their trading and instead, dedicate their time to methodology, technique, and “special indicators.”
Start by taking good care of your physical and emotional health.