Indice S&P 500Long
Did you mistake a correction for a bear market ?
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The words, bullish and bearish are so commonly used that we as traders can get suck in to what the media want us to believe.
Technically speaking, a bear market requires a minimum 20% fall from its peak. Thus, the recent plunge on 9 Jun 20 (Thursday) was only about half of the 20% (9% to be precise). This is not a bear market , yet!
If you know the power of using trend lines , then by plotting the charts, you would then be able to ride the market and make at least 5-7% profits on the fall and then reverse your positions to go long last night at 2971 to 3000 price level.
Relying purely on price action requires skills as candle stick reading can be quite confusing when you combine 2-3 candles together and interpret its meaning. And sometimes the obvious ones go the other way from its norm and that whack your brains and you wonder which method to rely on.
For me, it is always candlestick and then adding price action as confirmation. Yes, in this case, I will not buy at 2971 level but at 3040 instead. The importance is to catch the trend up than to get in at the precise price level. Of course, you make more profits by buying at lower price. Until my skills have surpassed the use of trend lines, the latter has been faithful thus far and provides me with more clarity than other indicators I have used.
All of us are wired differently. I may be comfortable with using trend lines but you may find it too simple and have problem believing if it works. That is absolutely fine. Go ahead and explore and find one that fits your personality. Most important of all, it must be able to help you to generate profits. Otherwise, it is at best an academic tool suffice to impress the readers but lack actual application in the real market.
Technically speaking, a bear market requires a minimum 20% fall from its peak. Thus, the recent plunge on 9 Jun 20 (Thursday) was only about half of the 20% (9% to be precise). This is not a bear market , yet!
If you know the power of using trend lines , then by plotting the charts, you would then be able to ride the market and make at least 5-7% profits on the fall and then reverse your positions to go long last night at 2971 to 3000 price level.
Relying purely on price action requires skills as candle stick reading can be quite confusing when you combine 2-3 candles together and interpret its meaning. And sometimes the obvious ones go the other way from its norm and that whack your brains and you wonder which method to rely on.
For me, it is always candlestick and then adding price action as confirmation. Yes, in this case, I will not buy at 2971 level but at 3040 instead. The importance is to catch the trend up than to get in at the precise price level. Of course, you make more profits by buying at lower price. Until my skills have surpassed the use of trend lines, the latter has been faithful thus far and provides me with more clarity than other indicators I have used.
All of us are wired differently. I may be comfortable with using trend lines but you may find it too simple and have problem believing if it works. That is absolutely fine. Go ahead and explore and find one that fits your personality. Most important of all, it must be able to help you to generate profits. Otherwise, it is at best an academic tool suffice to impress the readers but lack actual application in the real market.
Nota
If you bought at 3040, you would have made 120 points profits easily (3160-3040). Or did you hesitate and worry that it might fall? There is enough things to worry and if you do not follow your own strategy (for me is trend line, support, resistance and couple with price action, news are educational and entertainment mostly), then you would be like a headless chicken, running around with no direction. Make up your mind.
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