Today, I’d like to share a simple stock strategy that works.
Now you might be wondering:
“Why are you giving your stuff for free?”
Well, here’s the thing:
Still, I want to help as many traders as I can, including those who can’t afford my premium training programs.
Cool?
So, let’s get on with it.
First, I’d like to share with you 3 secrets about the US stock market that nobody tells you.
You’ll see the importance in a bit…
Secret 1: The US stock market is in a long-term uptrend
If you look at the chart of the S&P 500 over the last 10 years, 30 years, or even 90 years, you’ll notice one thing…
It’s in an uptrend.
This means you want to look for buying opportunities in the stock market—and ignore short selling.
Secret 2: Focus on the strong performing stocks
Here’s a fact:
Strong performing stocks are likely to outperform the market.
Why?
That’s because these stocks usually have a few things going for them like strong earnings, great company management, or positive sentiments around the stock.
And guess what?
These factors don’t just disappear overnight.
Instead, it can last for weeks or even months which explains why stocks can continue trending for months.
Secret 3: Stock prices don’t go up in one straight line
No matter how bullish the stock market is.
No matter how great the fundamentals are.
No matter how strong the stock is performing.
The fact is, stock prices don’t go up in one straight line.
Instead, it goes up, makes a pullback (or a retracement), and continues higher.
Now:
With the concepts I’ve just shared with you, let’s combine them into a stock trading strategy that works (and is backed by data).
Here goes…
Market traded:
- Stocks in the S&P 500
Trading rules
- The stock is above the 200-day moving average
- The stock price hits a 10-day low
- Place a 2% buy limit order below the previous day closing price
- A close above the 5-day moving average
Here’s an example…
NVIDIA (Entry)…
You might be thinking…
“Isn’t this a cherry-picked example?”
You bet.
So here’s the equity curve of this stock trading strategy over the last 21 years…
Can you see how powerful this is?