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【The Most Profitable Trades Are Long Bear Raid Bottoms And Short Short Squeeze Tops】
https://stockpriceforecast.substack.com ... s-are-long
In other words, one should buy at or near the exhaustion bottom price of bear raids and short the exhaustion peak of short squeezes.
Those extreme price levels are indeed the safest and most profitable. Being safest and at the same time most profitable may seem to defy the common sense that risk goes with reward. But it is in fact true, even if it seems to defy common sense.
All that is well and good, but then how do you know the price is under bear raid or short squeeze?
Indeed, for the great majority of traders and investors, they do not know. But the color bars shown in the video that accompanies this article is the key.
If the color bar is totally green, the stock price is at a [natural] bottom. Likewise, if it is totally red, the price is at a [natural] peak. However, big players can push price below its natural bottom. When that happens, the price becomes over-sold.
Similarly, after price has reached a [natural] peak, as shown by the color bar being totally red, big money can push its price higher, and the price then becomes over-bought.
Thus, we can readily tell if price is oversold or overbought simply by glancing at the color bar. Thereafter, we only need to use very short-term and tight trend lines (no need to really draw them, but one can do it mentally) that will track when downtrend (in oversold situation) breaks or reverses, which would be the buy signal.
Drawing mentally these very tight and short-term uptrend lines once a stock price is in overbought phase will enable us to detect the point of trend reversal, and that would be a sell/short signal.
Since the above methods enable to buy very close to the bear-raid bottom price and short very close to the short-squeeze peak, you are capturing price extremes both on the downside and the upside. These price levels have to be, and indeed are, the price levels where risk becomes lowest and profit potential becomes largest.
Using the above techniques, you are placing the best trades that you can possibly enter. This is fully utilizing the power of the U/D color bars.
The U/D color bars you see here are what makes stock trading extremely easy, simple, efficient and profitable and at minimum risk.
The above principles are not only theoretically correct but empirically proven. The biggest, most powerful and yet most unpredictable factor in financial markets, is artificial price intervention. Bear raids and short squeezes being the most common. Inexperienced investors and traders often get shaken out at the new artificial bear-raid bottom by selling and at the new artificial short-squeeze peak by short-covering or even buying on the false breakout. The color bars will reveal the truth and prevent you from making those worst mistakes, and do the opposite.
Despite the great benefits of the color bars, one should still always adhere to sound basic principles, such as diversification and only risk capital that one can afford to lose.
DISCLAIMER: The color bars and related content herein are for informational purposes only. They are not, and not meant to be, specific recommendations to buy or sell any stock or financial instrument. Past performance is no guarantee of future results and viewers and readers should always consult qualified investment professionals before they invest or trade, and even then only use risk capital. Since one cannot read minds, one cannot predict the degree and duration of bear raids and short squeezes. Thus even picking extreme bottoms and peaks may require diversification with respect to time, on top of diversification with respect to different stocks. Always reserve ample cash in advance so as to be able to capture price extremes, as they arise. Best wishes.
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