In this article, I am going to explain how to trade moving averages. This strategy doesn’t take a lot of time to manage. And I found out that it is the most stress-free profitable Trading strategy.
A little explanation about the system we live in
If we wouldn’t have inflation asset prices would fall and so would stocks and we would have a global meltdown. That’s why prices always need to go up for people to be more wealthy. The day we stop “printing” is the day the stock market is going to crash. Now I am not a big fan of inflation far from it. I am all for the free markets. But you need to learn how to profit from this. The way I see this system is that it drives innovation which is good. But at a huge cost of ordinary people that are taxed into oblivion.
Now you need to learn how to profit from this. Either open a company and produce something new. You should know that if you have a company you don’t have to pay taxes. Or learn how to invest your $$. Now I recommend both. But if you don’t have any ideas on how to open a company you should always invest your cash! Don’t spend it on useless crap.
Here is the strategy:
1.Always have some cash in your bank for a rainy day. I recommend having $$ for at least 8 months of expenses. That means if you spend 800$ every month (only for important things. Like mortgage, food, electricity bills etc.) Not Gucci clothes! You need to have at least 8000$ saved up.
2. After you have the backup fund saved in your bank you need to start investing. Because if you leave the $$ in your bank you will get eaten up by inflation.
My advice for all
Start investing early. Compounding interest is the 8th Wonder of the world.“Albert Einstein”
If you haven’t started, start now!
The stress-free strategy
In the long term, it’s better to be bullish than bearish.
Take a look at these 2 graphs. What do you see?
The Red line is the 200ema.
Blue line is 100Ema
Pink line is 55EMA
Green line is 21EMA
Did you notice that the price bounced always when we fell below the 200EMA?
How to find good companies to invest in?
Now the key here is that you need to find good quality companies. Not some that are below the 200EMA on weekly and buy them. Use common sense. For example CODAC stock. Does the world still use film to take photos? of course not. That’s why this stock crashed hard and never recovered.
So you need to ask yourself these questions. Does the world finance war and space exploration? Yes of course. Then put LOCKHEED MARTIN CORP, and NORTHROP GRUMMAN CORP onto your favorites. Do people play video games? Yes, ofc. Then put ACTIVISION BLIZZARD INC. into your favorites.
Does the world favor coal over green energy? “What do we still use coal? ” Good then put solar and wind companies into your favorites.
Will solar and wind be enough to power Tesla cars? I don’t think so. Good then put Uranium Stocks to your favorites.
Is Ecommerce the future? Good invest in Alibaba, eBay, Amazon.
My strategy: whenever the stock drops below 200ema weekly I am buying a lot of it. Because that means that it’s oversold. And Warren Buffet always tells that you should buy the stock when it’s on sale.
Now the hard part is selling it. That’s what you need to figure out yourself. But a rule of thumb is you should almost always sell when we get that euphoric moment when even the janitor talks about it. (Bitcoin 2017 anyone). Otherwise, you need to get a feeling for when to sell. And you get that with experience over the years. Being a crypto trader helped me a lot since there those cycles happen a lot faster than in traditional markets.
You can use the RSI indicator to see when the stock is overbought or oversold. If it’s over 80% it’s overbought and if it’s below 20% it’s oversold.
I am doing this strategy on the bigger timeframes. For Stocks 1D, 1W, 1M.
For Crypto 4h, 1D, 1W.
Now, these strategies work on any timeframe. But I like trading on larger timeframes as I don’t have time to stare at the graphs all day.
The S&P 500 index fund is always rising. Although slower than if you buy individual stocks. If you want to passively invest for 30+ years this is the obvious choice. Otherwise, I recommend individual stocks. Since the profit is much bigger.
Even after the great depression where it fell 80%. But it took it 10years to recover to previous highs. But if we get a crash like in 1930 then money will be the least of your problems. Then Gold or BTC would be the obvious choice to store value. You Should never be afraid of the future!
Now the key here is to Average Down when the stock drops. This is similar to the dollar cost average but here you only buy stocks when prices go down.
For example: say you bought 100 shares of the Uber stock at $20 per share. If the stock fell to $10, and you bought another 100 shares, your average price per share would be $15. So now the stock only has to rise above 15$ for you to make a profit. Simple math. Of course, there is a risk of the stock going even lower or even 0. That’s why you only invest in sound companies and don’t risk your entire portfolio on a single stock.
You should only invest in companies that you trust. You must research them. Don’t invest in them just because some random guy on Twitter or Youtube is shilling them. They might dump it on you. You need to understand that they are mostly broke guys that make money out of viewers so they will do anything to get views.
After all, it’s your money and your life. Money=Time. And you only have a limited time left on this world so use it wisely.
Most important lesson. Greed kills. Never ever let greed take over your emotions. Never FOMO buy or Panic sell.
Use the moving averages to your advantage and also check out these 2 websites for fear and greed index.
For Crypto: https://alternative.me/crypto/fear-and-greed-index/
For Stocks: https://money.cnn.com/data/fear-and-greed/
Also for automation trading, I recommend that you use 3commas for crypto. It’s really easy to learn and it’s 1000x better than trading on any exchange.
The way it works is that you connect an exchange. For example Binance through an API key to it and trade on the 3commas website. I recommend watching some youtube videos for 3commas. And then decide for yourself if it’s for you or not. You can even set up bots there and make trading fully automated. But I am using only the smart trade feature atm.
For stocks, I found a really good website that professionals use, and its free at the moment: https://www.quiverquant.com/
You need to signup to use it. You can also see some insider trading from the senate who sold and who purchased the stock.
For example here you can see what happens to some of the stocks if Trump-Biden wins the election: https://www.quiverquant.com/blog/092420
So there you have it the stress-free Profitable Trading Strategy!
Also please check out my other Posts
Best Online Brokers for Stocks, Crypto, and Precious Metals: https://titanstrading.io/best-online-brokers-for-stocks-crypto-and-precious-metals/
Stocks that are on my Watchlist in 2020 and beyond: https://titanstrading.io/stocks-to-watch-in-2020-and-beyond/
Ray Dalio The changing world order: https://titanstrading.io/ray-dalio-the-changing-world-order/
Also if you lack motivation I recommend reading this article: Alcohol, Drugs, Smoking Weed, Playing Video games, and watching Porn. You need to STOP doing these things