Comments from a member:
Hello Sanjoy,
So far I like what I see. I would like to know if you have come across stocks with a high PR that actually failed. Examining these samples visually would also be of great help to avoid losses. Please post examples if any. Many Thanks
Sure, I would paste these failures also. It would be educational for all of us to analyse them.
Actually, there will be failures, but if you follow risk management and capture the BIG moves profitable, you will more than make up for the failure.
See the previous post of MRGE. If you look at the past moves of MRGE, there is a MAJOR Up move and a MAJOR down move.
Capturing these moves will more than make up for any losses due to false signals.
Also, if you notice, you can see that before October month, there was not a large profit. The big move came only after an upward breakout in October first week.
Note how the price chart turned red around November last week even though the stock was moving higher. This indicated that the buying power was drying up and it was time to take profits and make the cash register ring.
From Jan mid week to Feb last week, you would have made a little bit of profit.
From Feb last week, the market made a HUGE down move and if you had been prepared for it, made a lot of money in the down move.
Here is what we can conclude from this study.
Huge up moves or down moves usually come after some trendless sidewards movement. You have to patiently wait out the sidewards movement and catch the BIG trend.
You will not be able to buy or sell at the EXACT top or bottom but will be able to capture the MEAT of the big move.
Proper risk control and money management is essential during the trendless sidewards move to avoid wasting and losing money needlessly.
Now, we have got a sell signal in MRGE again. Where will it go ? No one can predict. However, the odds are in our favour because it is already in a down move. There is lot of selling pressure with low DreamTai power ranking. So, there is more change it will go down.
I would welcome your feedback, comments and suggestions.
Thanks to the member who asked this question!!
