Acceleration Bands

 Acceleration Bands

• Serve as a trading envelope that factors

• The standard setting is 20 candles.

• They can be used across any time period as breakout indicators outside these bands.

• Acceleration Bands are plotted around a simple moving average as the midpoint, and the upper and lower bands are of equal distance from this midpoint.

• Can be used in both growth and value trading strategies to show the potential breakouts.

McGinley Dynamic Indicator

McGinley Dynamic Indicator:

• It was invented by John R. McGinley.
• It would automatically adjust itself in relation to the speed of the market.

This future can be very helpful as it is sometimes difficult to choose the right period for the MA. 

• It also helps to account for the gap that often exists between prices and moving average lines.
• Can't be used as a single indicator and we need to combine this with other indicators or another McGinley indicator.

Price actions respect moving averages because so many traders use them in their strategies.

Because of the formula, the Dynamic Line speeds up in down markets and moves more slowly in uptrends. One wants to be quick to sell in a down market, yet ride an up-market as long as possible. 

News trading strategy

 A news trading strategy takes into account:

• News and market expectations before news releases.
• News and market expectations after news releases.

News trading tips:

• News can travel very quickly on digital media, so you need to be quick.
• You should make a quick judgment to figure out if the news already fully factored into the price? 
•  If the price is not matching the expectations how far it is from the expected number?
• Use any news as an individual entry and if there is more than one news use your judgment for the combined outcome.
• Have a strategy for any specific news release.
• Market moves are based on demand and supply and demand is heavily affected by the news.
• Every day there is a lot of news so we have lots of opportunities to trade.
• The market normally gets volatile if the news is not as per expectations.
• Use stop-loss using the previous resistance and support lines.

Short Squeeze Strategy

#sell

#short

#squeeze

#buy

#long

#stocks

Triangles Patterns

We have 3 different main types of triangle patterns. Symmetrical Ascending Descending

Head and Shoulder Pattern

 Please watch the video to understand how this pattern shapes.

• A Head and shoulders pattern is described by three peaks, the outside two called left and right shoulders which are close in height and the middle is the highest named Head.
• A Head and shoulders pattern describes a specific chart formation that predicts a trend reversal or a price consolidation in a very trendy market.
• The head and shoulders pattern is believed to be one of the most reliable patterns.

Top-down or a Bottom-up basis to choose the best stocks for your portfolio

 Top-Down Active Management

Asset allocation

At this stage of the top-down process, asset managers try to determine which areas and asset classes are most likely to produce the most attractive risk-reward returns.

As an example, they may decide that the US stock market is going to outperform, so they allocate say 50% of the portfolio to the US stocks. ( We will talk about choosing the right stocks on next steps )

Also, they may decide that the Crypto market will enter another bull market and they also allocate say 5% to Crypto. The same for commodities $OIL  FOREX, etc.

Sector selection 

Depending on what stage of the economic cycle we are we should choose different stocks.

For example at the start of a bull run, banks could be a good sector while at growth phase leisure or airlines are the best and at the end of the bull market, we may look at pharmaceutical shares, etc.

Stock selection

After choosing the sectors you should use your fundamental or technical analysis skills to find the best stocks for your portfolio.

Fundamental analysis: For example by looking at companies' balance sheets, earnings reports, etc. to find undervalued stocks.

Technical analysis: By looking at charts and trends to find the best entry points.

Bottom-Up Active Management

The main focus here will be solely on the individual stock's unique attractions. The stock selection is based on specific criteria that asset manager applies to their strategy. For example, different fundamental ratios to find out the companies based on their value, growth at a reasonable price, momentum, and contrarianism.

For example:

• By looking at company reports they may find that $NAS is undervalued and could be a good investment.
• By looking at steady growth they may decide $AAPL should be included in the portfolio.
• By looking at a large increase in $STMP price, it will be selected based on the momentum.
• Or they may choose $HMMJ as they believe going against the trend will bring high returns.

I am a fan of the top-down method as it suits my strategy better and I feel more organised by implementing it.

By Nina