Miscellaneous

Question 1

When a _________ _________hits your scanner first reaction for most is to buy. 9x out of 10 if you wait for a ________ ___ _______your odds improve if you decide to add.

Answer 1

When a volume spike hits your scanner first reaction for most is to buy. 9x out of 10 if you wait for a retest to vwap your odds improve if you decide to add.

Question 2

________ _______ tend to hold and pay up to get in. Don’t be so quick to add until you see a _________ too.

Answer 2

Size buyers tend to hold and pay up to get in. Don’t be so quick to add until you see a trend too.

Question 3

Downtrend - ___ probability swing trade that will ___ __________ moves. No Consolidation, also traders A,B, C, are in ______ they will sell some on bounce.

Answer 3

Downtrend - Low probability swing trade that will not sustain moves. No Consolidation, also traders A,B, C, are in loss, they will sell some on bounce.

Question 4

Uptrend - ______ probability swing trade on ____ ________ in uptrend.

Answer 4

Uptrend - High probability swing trade on pullbacks in uptrend

Question 5

The stock market always ____________ in both directions!

Answer 5

The stock market always overreacts in both directions!

Question 6

Wait for that “correction” and even more evident than stocks; you make your ________ when you ___ not when you ____.

Answer 6

Wait for that “correction” and even more evident than stocks; you make your money when you buy not when you sell.

Question 7

When the market or a stock goes __________ __, there is a good chance the correction will be quick and violent. The reason is - so many people are ____________ ___________. Once the stock starts to drop it starts to tumble and people quickly take their profits similar to a panic sell.

Answer 7

When the market or a stock goes straight up, there is a good chance the correction will be quick and violent. The reason is - so many people are holding profits. Once the stock starts to drop it starts to tumble and people quickly take their profits similar to a panic sell.

Question 8

When your trading - how good or bad the company is doesn’t matter, what matters is what the __________thinks about it.

Answer 8

When your trading - how good or bad the company is doesn’t matter, what matters is what the market thinks about it.

Question 9

The market is always looking for _________________

Answer 9

The market is always looking for Inefficiencies

An example would be a sector getting hot and leaving a particular stock behind. Eventually this stock will catch up - all things being equal

Question 10

Volume gaps (Price at Volume) are gaps where the stock price can move __________

Answer 10

Volume gaps (Price at Volume) are gaps where the stock price can move quickly.

Question 11

BRB

B________

R________

B________

Answer 11

BRB

Breakout

Retest

Bounce

Question 12

False Breakout

Price closes above the _________line or _________line, and then quickly falls back down below it

Answer 12

False Breakout

Price closes above the resistance line or trend line, and then quickly falls back down below it

Along with volume as a confirmation of the breakout another sign of confirmation of the breakout is another green candle close above the resistance line or trend line

Question 13

Resistance is where the _________show up Support as where the __________show up

Answer 13

Resistance is where the sellers show up support as where the buyers show up

Question 14

Risk Management

Look at the Historical on the 1 hour chart, and see what happens directly after the stock gets to overbought.

Typically, there is an inevitable ______

Answer 14

Risk Management

Look at the Historical on the 1 hour chart, and see what happens directly after the stock gets to overbought.

Typically, there is an inevitable Dip

Question 16

A stock is like a hockey team. The more wins it gets the more fans it gets. It gains momentum as it moves upwards. The interesting thing is, if there are bag holders in the way, old fans are jumping off as new ones join in, so it’s growth is slowed. However, if it’s an expansion team, and it’s the first ride up, there are no bag holders and the pathway is much easier and more clear. It will move smoothly and quickly.

Answer 16

A stock is like a hockey team. The more wins it gets the more fans it gets. It gains momentum as it moves upwards. The interesting thing is, if there are bag holders in the way, old fans are jumping off as new ones join in, so it’s growth is slowed. However, if it’s an expansion team, and it’s the first ride up, there are no bag holders and the pathway is much easier and more clear. It will move smoothly and quickly.

Question 17

When a stock drops below _________ it gains momentum to the downside. This means the tendency for the moment will be that it continues _________. Stopping itself from dropping requires effort and _____. Only once it has stopped can it regroup and think about moving upwards once again.

Answer 17

When a stock drops below support it gains momentum to the downside. This means the tendency for the moment will be that it continues downward. Stopping itself from dropping requires effort and time. Only once it has stopped can it regroup and think about moving upwards once again.

Question 18

The stock that’s dropped, has to stop dropping before it can start _______ again. And when it does start climbing again, it has to work its way through all of the _____ that are in the stock at a ______. These traders will sell once they break even, providing resistance for the upward momentum.

Answer 18

The stock that’s dropped, has to stop dropping before it can start climbing again. And when it does start climbing again, it has to work its way through all of the traders that are in the stock at a loss. These traders will sell once they break even, providing resistance for the upward momentum.

Question 19

History has taught us that, when a stock is trending __________, it will continue to do so — that is, until it reaches ______________.

Answer 19

History has taught us that, when a stock is trending upward, it will continue to do so — that is, until it reaches resistance.

Question 20

The increase in buying and significant gains that follow a bullish break through the 52-week high is the result of two key factors:

Visibility. Reaching a 52-week high is a big achievement for a stock, and the levels of support and resistance at 52-week highs and lows are strong. As a result, the investing community heavily tracks stocks nearing or which have hit their 52-week highs. In fact, there are several stock investment research websites that pour quite a bit of resources into creating lists of stocks that are near or have reached this point. Because investors track this so closely and 52-week high lists are publicized by big names like Nasdaq and The Wall Street Journal, these stocks enjoy increased visibility, which organically increases buying.

FOMO. The other side of the equation is fear of missing out, or FOMO. History suggests that if a stock breaks past its annual high, it will outperform the overall market ahead. The fear of missing out on the potential to beat the market leads to further increased buying.

Answer 20

The increase in buying and significant gains that follow a bullish break through the 52-week high is the result of two key factors:

Visibility. Reaching a 52-week high is a big achievement for a stock, and the levels of support and resistance at 52-week highs and lows are strong. As a result, the investing community heavily tracks stocks nearing or which have hit their 52-week highs. In fact, there are several stock investment research websites that pour quite a bit of resources into creating lists of stocks that are near or have reached this point. Because investors track this so closely and 52-week high lists are publicized by big names like Nasdaq and The Wall Street Journal, these stocks enjoy increased visibility, which organically increases buying.

FOMO. The other side of the equation is fear of missing out, or FOMO. History suggests that if a stock breaks past its annual high, it will outperform the overall market ahead. The fear of missing out on the potential to beat the market leads to further increased buying.

Question 21

In fact, in the month following a 52-week high breach, small-cap stocks produced 1.8963% excess gains when compared to the overall market, while large-cap stock excess gains after a month were just 0.6275%.

Regardless of the market cap, the paper suggested that the largest gains were experienced in the week following the breach of the 52-week high. Excess gains in the weeks following the breach tapered off at about the same rate, regardless of market cap.

Answer 21

In fact, in the month following a 52-week high breach, small-cap stocks produced 1.8963% excess gains when compared to the overall market, while large-cap stock excess gains after a month were just 0.6275%.

Regardless of the market cap, the paper suggested that the largest gains were experienced in the week following the breach of the 52-week high. Excess gains in the weeks following the breach tapered off at about the same rate, regardless of market cap.

Question 22

Their report showed that when an entire sector nears its 52-week high, individual stocks within that sector are likely to see excess gains that are higher than stocks that breach 52-week highs in a mixed or downtrodden sector.

Answer 22

Their report showed that when an entire sector nears its 52-week high, individual stocks within that sector are likely to see excess gains that are higher than stocks that breach 52-week highs in a mixed or downtrodden sector.

Question 23

Why is it that when a stock breaks through its 52-week high, it’s likely to see significant gains that outpace those of the overall market? Well, it all goes back to the basic human emotions of fear and greed.

Buying a stock near resistance adds to the level of risk you accept when you make the purchase. As a result, when stocks are near this point, positive news is often underpriced in market reactions as investors fear a reversal ahead.

When solid fundamentals and positive news persist and the stock breaks through the 52-week high barrier, greed starts to take over. There’s a strong chance that history will repeat itself and the stock will climb.

Investors don’t want to miss out on this, leading to an influx of buying. At this point, recent news is often overvalued, leading to a significant short-term run in value.

However, it’s important to keep in mind that excess gains generated by 52-week high breaches don’t last forever. Although excess gains are generally experienced for a month or two, the growth can slow significantly over time, leading to a long-term underperformance when compared to the overall market.

As a result, even if you buy a stock just before or just after it breaches the annual high, it’s important to pay close attention to the performance of that stock over time.

Answer 23

Why is it that when a stock breaks through its 52-week high, it’s likely to see significant gains that outpace those of the overall market? Well, it all goes back to the basic human emotions of fear and greed.

Buying a stock near resistance adds to the level of risk you accept when you make the purchase. As a result, when stocks are near this point, positive news is often underpriced in market reactions as investors fear a reversal ahead.

When solid fundamentals and positive news persist and the stock breaks through the 52-week high barrier, greed starts to take over. There’s a strong chance that history will repeat itself and the stock will climb.

Investors don’t want to miss out on this, leading to an influx of buying. At this point, recent news is often overvalued, leading to a significant short-term run in value.

However, it’s important to keep in mind that excess gains generated by 52-week high breaches don’t last forever. Although excess gains are generally experienced for a month or two, the growth can slow significantly over time, leading to a long-term underperformance when compared to the overall market.

As a result, even if you buy a stock just before or just after it breaches the annual high, it’s important to pay close attention to the performance of that stock over time.