I have been looking for a consistent US30 strategy I can learn to trade. Just in the videos I’ve watched I hear often that price action is the best strategy. I know with price action you find key levels and watch for candle reactions from them. My question is, what should I look for with US30 specifically and am I just watching for breakouts?
Thank you so much! Any secrets and tips are greatly appreciated!
I suspect that you may not be unique in that regard. There are tons of strategies out there floating around on places such as youtube. I would suggest you test a few and if you see one that seems to work for you try to master that one.Good luck.
From the standpoint of using the chart to identify entry and stop-loss price levels then whatever works just as well on other charts also works on the indices like the Dow. Or should I see just as badly?..
Anyway, the only key difference between the Dow chart and for example the EUR/USD chart is that the index is structure and managed so as to be more positive than negative. It is the sum of the prices of the 30 biggest listed US companies. So if the price of one of them falls and the company is now actually a smaller share of the stock market than it was last year, that company will soon be removed from the index and a new one added, the new member having larger market cap and a higher share price.
This means the index long-term is being managed to rise. On top of this it is an index reflecting the commercial power of the world’s largest national economy. These effects are long-term but they pre-dispose the Dow to be bullish.
As Tom says stocks are much different than fx even though on a chart they look the same.
There are quite a few more tools at your disposal and it takes a time to learn/understand them, but as always one step at a time.
Stocks in general reflect the current state and outlook of business - the healthier that state then the more investors want to participate in a share of the profits.
Some of the tools at your disposal are such things as sectors within the S&P, or breadth of price movement - e.g. in the US30 are there just 1 or 2 businesses that are shining much more than the rest causing a push up in the index (this is viewed as narrow and likely not have follow through) - or in the S&P sectors is it only defensive stocks that are on the rise - again likely not a follow through.
Then again the economy affects business, is the outlook good for business, if yes then good chance that the trend will be upward.
Here is what Ryan Detrick CMT posted on x 12 months back when he posed what could spark a stock rally in the then incoming 2023 year:
“What could spark it? It will likely be better trends in inflation, which could open the door for the Fed to turn slightly more dovish, Coupled with what we continue to believe is a healthy and robust consumer, the economy may likely avoid the recession that many are expecting…”