How to buy shares at the end retracement

Stock trading has become a very popular business in today’s world. Thousands of investors are making millions of dollars just by taking the trades in the major stocks. But earning money in the stock market is not as easy as it seems. Most stock traders buy the stock at the deep without knowing when the retracement might end. Very few traders have keen knowledge about the concept of retracement. The rookies are so biased with the concept of indicators and EAs, they hardly get any time to get into the essential elements of trading. To become a good trader, you must learn to trade with the key metrics. In this article, you learn to take trades at any financial market by using the most important parameters.

Understanding retracement

People who have basic knowledge about retracement often misguide the others by saying retracement is just one kind. But in the financial market, we have bullish and bearish retracement. Since we are looking to learn the method to buy the stock at the best price, we have to know about bearish retracement. When the price of a certain asset is strong uptrend but you notice a decent drop in the price that drop is known as a bearish retracement. To buy the stock at the best price, you have to know the endpoint of such retracement. Let’s learn some amazing techniques by which we can take trades in the stock market like a pro.

Finding the endpoint of retracement

To find the endpoint of retracement, we can use two concepts. Either we can depend on the chart pattern formation or we can use the Fibonacci retracement tools. Fibonacci retracement tool is widely used by the elite traders as it can tell you how far the retracement is taken place. For instance, if the price hits the 50% retracement level, we can say the bullish rally is faded by 50%. This means, nearly 50% of the gains have been erased from the market. Some traders prefer to chart pattern trading techniques. But to find the chart pattern, you should have a keen eye. However, many retail traders are using the auto chartist since it can draw an important chart pattern with accuracy. The endpoint of the retracement can be identified with the help of a chart. But there is a small twist while using the chart pattern.

Twist in chart pattern

The chart pattern is mostly used as a continuation and reversal pattern system. But if you ask yourself, how to buy shares using the concept of the chart pattern, you will notice the retracement is not an action. We are using the market momentum to trade the chart pattern. So, the expert uses both chart pattern and Fibonacci retracement tools to buy shares at the best price. Let’s give you a simple example that will help you to understand why both of these methods are used by the professionals. Let’s say, the price of a stock is testing the 50% retracement level. Right at that level, you have to low of the double bottom pattern. Chances are high the bulls will gain control of the market from this level and push the price to a new high. So, it’s an ideal place to buy shares for certain stocks.

Analyzing the company portfolio

Before you buy shares for a certain company, you have to analyze the company portfolio. Depending on the technical factor is not enough to buy shares at the most desired price. You have to analyze the portfolio of the company so that you can assess the potential growth for that company. Without knowing anything about the company’s infrastructure and business policy, it is very hard to relate to the global economy with the performance of that stock. It’s not about fundamental analysis rather getting deep into the company. You are going to buy the shares of a certain company which means, you are becoming an owner for a certain portion. Being an owner, you must know about your business model. If you ignore this step, you are ignoring the most critical concept of buying the shares at the best price.

Managing the risk exposure

Knowing to find the perfect price to buy the shares should not make you a greedy trader. The investment industry is full of surprises. Let’s say, a company is going to launch a new tech device the next month and you are expecting to see a strong rise in the price. You have done the proper analysis, and you are 100% sure the porotype is perfect. There is no doubt, the shares for that company will rise as soon as they announce their latest innovation. But due to a natural disaster, the company had to abort the product launch for six months. But you have already gone long and the price Deeping in the market. You might not remain solvent for those six months. The best idea is to cut the losses early.

Every trader should have a risk management plan for the trades. Buying shares is not that you are expecting a certain amount of return after a specific time. You have to evaluate the risk to reward ratio for that trade and only then your knowledge to find the perfect price to buy the shares will be useful.



*** BEST STOCK NEWSLETTER of 2020 ALERT ***

Updated September 13, 2020

At WallStreetSurvivor, we subscribe to dozens stock recommendation and advisory newsletters. There is ONE newsletter that is constantly outperforming all of the others--The Motley Fool Stock Advisor.

ONE of this year's Motley Fool Stock Picks Has Already quadrupled, ONE has tripled, and another TWO Have Already Doubled in just 8 months of of 2020!

We have been tracking ALL of the Motley Fool stock picks since January 2016. That's almost 5 years, 55 months and 110 stock picks. As of Friday, September 11, 2020 the Motley Fool's January 2 stock pick (TSLA) is up 333%, their March 19th pick (ZM) is up 209% in just 6 months, and another two have more than doubled. In addition, 6 of their 2019, 8 of their 2018, 8 of their 2016, 9 of theire 2017 and 13 of their 2016 picks have also doubled. Most impressively, over the last 5 years that we have been tracking every recommendation, their average stock pick is up 135%. That beats the SP500 by an average of 95%. And that's even accounting for all of this COVID mess that has wreaked havoc on most stocks. BUT, the Fool has done so well because they have quickly identified stocks this year that will perform well in the post-COVID world. THAT is how the Fool consistently does so well--they adapt and constantly pick stocks before everyone else realizes the opportunities.

  • CrowdStrike (CRWD) -- June 4, 2020 pick is already up 32%
  • Shopify (SHOP) – April 2, 2020 pick and it is already up 164%
  • Zoom Video (ZM) – March 19, 2020 pick and it is already up 209%
  • DexCom (DXCM) picked Feb 20, 2020 right before the market crashed and it is still up 41%
  • Tesla (TSLA) picked January 2, 2020 before the crash and it is up 333%
  • HubSpot (HUBS) picked December 5, 2019 and it is up 82%
  • Netflix (NFLX) picked November 21, 2019 and it is up 54%
  • Trade Desk (TTD) picked November 11, 2019 and up 117%
  • Zoom Video originally picked Oct 3 and it is up 398%
  • SolarEdge (SEDG) picked September 19, 2019 and it is up 105%

Now no one can guarantee that their next picks will be as strong, but our 5 years of experience has been super-profitable. They also claim that since inception, their average pick is up 529% and now we believe them. You sure don’t want to risk missing out. Many analysts are saying that we have passed the bottom of this COVID crisis and stocks will recover quickly. So make sure you have the best stocks in your portfolio.

Normally the Fool service is priced at $199 per year but they are currently offering it for a NEW SUBSCRIBER DISCOUNT of just $99/year if you click this link

CLICK HERE to get access to all The Motley Fool’s Stock Picks and their next 12 months of picks for just $99 per Year! 



GET UP TO $1,000 IN FREE STOCK

WHEN YOU OPEN A ROBINHOOD BROKERAGE ACCOUNT

Robinhood was the first brokerage site to NOT charge commissions when they opened in 2013. They just past 10,000,000 accounts and to celebrate they are offering up to $1,000 in free stock when you open a new account.

Here’s the details: You must click on a special promo link to open your new Robinhood account. Then when you fund your account with at least $10, you will receive one stock valued between $5 and $500. Then, you will get a link to share with your friends. Every time one of your friends opens an account, you will receive another free stock valued between $5 and $500. Click here to learn more about this Special Robinhood offer.

Claim your free stock NOW (before it’s too late)



Leave a Reply

Your email address will not be published. Required fields are marked *