How does a beginner trader / investor buy a stock they see value in and average up into it. Here is the 3 stages of a reversal.
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Hey, what's going on team, it's ricky with techwith solutions and as the stock market is pulling on back a question that everyone is asking is: is now the best time to buy right. I think again, i'm going to be sharing my experience and let me know in the comments section what you think about this approach. A lot of people, a very traditional way, is just always by the dip right but, like you guys have seen before. If you have any experience in the stock market, when you buy the dip, it doesn't necessarily mean it's gon na recover right away.
So sometimes you put yourself in an uncomfortable situation and for beginners it's positions and situations that you can't really tolerate. So i hope that this video gets you one step closer to your overall goal. If it does - and you agree with what we shared in this video, i hope that you can drop a thumbs up if you feel like we earned it and consider subscribing as well as i'm not going to be using any specific stock as there's so many people That are going to be watching this video, and one of the things that we always want to encourage you to do is to be your own person. We all see value in different ways and we all invest in different ways.
That's besides the point right and what stock you see value in that! That's that's on you, but i think that, with these three stages of a reversal, which is something that we've shared within our learn plan profit group. It has at least allowed us to be able to put ourselves in a position in which that we are more likely to succeed and, let's be honest right, not every trade or investment goes according to plan, but i hope that with this video it just gets you A little bit closer, at least in a position to succeed as well. So what do we mean by the three stages of a reversal? One of the things that you might be experiencing is as you're watching this video. What is the current stock market? Doing the current tech market is selling off and why not just go all in right now right? Well, we don't know if the market's going to continue to sell off.
So do you really want to buy the dip on something that might continue to continue? What it's doing in the past right and that's continuously, go down. So let's say again just an example: you have ten thousand dollars in your account. It doesn't actually matter if you have a thousand dollars a hundred dollars or a hundred thousand dollars. It's the idea.
So we're going to be using percentages as an example or as a reference in this video. So one of the things that we have shared so many times before is with the three stages of a reversal. I'm going to be dividing these parts into three sections right. There's the rejection phase, so what does that mean? Well, it's pretty much the stage that we are currently at as of right now the market is currently selling off, meaning that do i really want to go all in when it's selling off or do i want to wait for some form of consolidation, some indication that Hey there might be a support level here and it might actually begin to recover right, like we've said so many times before. Confirmation is key and there's no such thing as a perfect support level that always acts as a support. But at least it's a better indication that the stock or the market is trying to stop selling off and that's the whole idea right. You want to put your money in something that is actually making you money, not something that is only going to continue to sell off right, and this intention is for long-term plays for investments not necessarily day trades right. So this is the rejection phase.
This is what we call stage one in this stage. If you are experienced, if you're a beginner again, please make sure that you understand that position that you are in the way that i personally would approach stage number one is either not buy in at all so zero percent invested if the market is still aggressively selling. Now, who's the zero percent, the zero percent are the people that can't tolerate pullbacks. That's not to call anyone out.
It's just based off of experience level, you're right when i was a beginner, and i have no experience it's difficult for me to go into a position. Knowing that it could still sell off, i'm just not experienced enough to be okay with that and that's okay right, we're all in different levels versus someone that might have experience and might just want to get some skin in the game. But are you gon na go in with the full ten thousand dollars? No, i put ten percent, so if i go in, if i have ten thousand dollars in my account again just an example - and i go in with ten percent, what does that do for me that allows me to have enough skin in the game that i feel Motivated to follow up with it, but guess what like we've seen for the past couple of days. If the market continues to sell off, it's not going to put me in an uncomfortable situation, because i did it in a tasteful manner.
I put myself in a position in which i can succeed in and it doesn't mean that it has to play out perfectly, but guess what it's going to be a lot easier, and you answer this in the comments section. How many times have you gone all in when you buy the dip and it begins to sell off and you freeze, you hesitate why, because you're so emotionally inclined in that position? You're just like. Oh my god. I can't tolerate this.
I'm not okay! With the market selling off, when i'm fully invested, i can't buy the dip or buy the dip even lower, because it's still selling off and i'm all in so with this tasteful position again, it's just an idea. It's just the percentage. You can formulate your own percentage. You do it in a tasteful manner that puts you in a position to succeed.
So if it continues to sell off yeah it sucks, you have a thousand dollars or ten percent of your account in something. But you did it in a tasteful manner that you're less likely to hesitate to cut losses right because you have less money on the line and or you can tolerate it. So if it drops another five percent, then who cares? Because you did it with a position of only ten percent of your overall account size, so the dollar amount at risk is much less. Let me know what you think about that in the comments section. The second right is the consolidation stage. You've seen this so many times right, especially if you love trading reversals, it's one of my favorite patterns to trade and again, that's just my opinion, but this is when it begins to formulate a support in very simple terms. It's when it no longer continues to sell off, and what this begins to indicate is not that it has to recover right away, and this is stage number two, and this is actually indicating signs of a potential support level. So with that, i can maybe gain a little bit more confidence to maybe begin to add more to my position, size or maybe take my first position right so on this one, i'm going to say anywhere from 10 percent to 20 percent is when it would make A little bit more sense because there's actual indication of a potential support level that hey, we might be finding a support level here.
It might be getting ready to begin to indicate signs of an uptrend, but we still don't know 100. So you still have to be careful. Your risk management still has to be in in place and if you're an absolute beginner, then again you might want to be closer to the zero to ten percent. Even during this stage, because if you can't tolerate pullbacks, then don't put yourself in a position to fail right, especially when we definitely don't have confirmation of a reversal.
Consolidation does not mean confirmation. What is confirmation well when it does the exact opposite of this? When a stock sells off, i mean, hopefully it doesn't just dump right away right, it sells off, it tries to recover, it gets rejected, it makes lower highs and it sells right back off again. So we want to see the exact opposite during the confirmation, and this is the third stage. This is the most important stage and think about this.
How many times have you waited for rejection, consolidation and confirmation? It takes patience right. It takes patience to effectively invest in this market and i'm not perfect. I make mistakes all the time i get very impatient sometimes, and i might go in a little bit too aggressive there or i might go in a little bit too aggressive with the second stage. But the idea with this is as you're learning how to do something focus on the learning part, not so much on the making money and do it with a dollar amount in which you can tolerate.
So if you can see, if you, if you begin to test these three stages out, you'll, begin to understand what you work well with and what you don't, maybe you're someone that only wants to buy on the third stage, maybe the second stage or maybe you're. Okay, because you have a higher risk, tolerance that you might want to buy on the first stage. You know there's no perfect way on approaching the market. There's so many different ways just make sure that you understand that and that you at least learn from your mistakes. So the third stage, pretty much means that we begin to indicate signs of an overall uptrend. This is when we actually begin to no longer sell off right, no longer sell off no longer consolidate, but wherever this consolidation was, we actually begin to indicate signs of an uptrend on the very traditional route. What this means is, you know, on the 180-day four-hour time frame, it's when it begins to break above the ema line and formulate higher highs. The ema line would be something along the lines of this and when it pulls back the ema line acts as a support.
It picks back up. It pulls on back the ema line, access support, essentially the exact opposite of when the ema line is acting as a resistance, and if you have experience on the market, you probably know exactly what it is that i'm talking about, and during this stage does it mean That you go all in again, it's all dependent on your risk tolerance. The way that i like to do it is again the word that we're going to be using is a tasteful way. A tasteful way to average up is once it's actually beginning to indicate signs of an uptrend.
What's the whole purpose that we're in the stock market for the whole purpose is to put our money in stocks, invest money in stocks right that are indicating signs of an uptrend? Why? Because we want to put our money in something that will make us more money, that is showing signs of growth. So, wouldn't it make sense to wait for confirmation to indicate signs of an uptrend to actually wait for the opportunity to present itself to put ourselves in a position to succeed. It's not so much always about what stocks you buy, but more often than not the time that you decide to buy them and when it actually makes sense. Let me know if you think that you agree once it actually begins to indicate signs of an uptrend.
The way that i would personally approach, this is again dependent on your risk. Tar lawrence is this is when i would begin to average up into this position so anywhere from 20, and as it continues to indicate signs of an uptrend, then that's when you can scale into you know overall, 100 or even if you know, because you're just getting Started and you're still learning how to trade, then guess what if you don't ever want to go in a hundred percent, meaning that if you have ten thousand dollars, if you don't ever want to go in with the full ten thousand dollars, because you're just getting started Or even a thousand dollars and you're just getting started, i think that's an amazing way to approach the market, it's not so much about when you're getting started and how aggressive you approach it. But if you really think about it, if you put yourself in a position to succeed and you really take into consideration your position size and you do it in a tasteful manner, you have nothing but time to make money in the market. You have nothing but time to scale. Ask yourself this simple question: are you trading right now or investing right now what you think you will have five or ten years from now? No because you're a beginner you're just getting started and you barely, if anything, have any experience but with everything right when it comes down to scaling and experience and what you can tolerate, you're bound to begin to trade with more and invest with more down the road. So why are you trying to make it or break it right now, so never be encouraged to put yourself in a position to fail, just because others are doing it. Who cares? Do it in a tasteful manner, so again being able to wait for proper indication of an uptrend people love to ask when is it the right time to buy? This is something that you can test out. One of the things that i like to look for is as we're indicating signs of an uptrend when it pulls back and it validates the ema line as a support, and it pulls on back validates it as a support and begins to indicate signs of an uptrend.
Then that's when i can load up on it: five, ten percent incrementally as long as it stays true to this reversal, and it continues to indicate signs of an uptrend, then that's when i can continue to load up on it and then once we approach the previous Resistance level or indicate any signs of a resistance level where again patterns tend to repeat themselves they don't always have to. But if we actually begin to break below ema, maybe we don't get all the way to the previous um. You know resistance level. Whatever the case might be, never be afraid to lock in profits, i can't stress that enough.
You know people love to and we joke around about it all the time and trust me i get it. You know diamond hands paper hands, they can come up with any name right. We've talked about it within the lpp group. You can call me poop hands at the end of the day, but guess what? If you lock in profits, there's nothing wrong with keeping some of those profits in your pocket, especially as you're learning how to do something think about that, what a beautiful time to be alive, where you're learning how to do something and making money during that process.
It's the best of both worlds, so why would you be so eager to lock in profits when you're, not trading or investing with the dollar amount that you can be down? The road you're almost not doing your future self, a favor? By approaching it in such an aggressive way, let me know if you agree right, there's so many different ways on how to do well in this market. This is just one of many ways, though. My whole focus for this video is now as the market is pulling on back. This is the time that it makes the most sense for me to begin to load up on positions. This is the time that it makes the most sense to create an effective watch list of stocks that i want to invest in long term, because they're all discounted, not when they're at 180 day highs, not when they're at all-time highs, not when everyone else is buying And investing into them there's no margin then, but while everyone is freaking out and the market's pulling on back, then guess what, if you're, not fully invested if you're not invested at all, it's like a sale. If you actually think about a big picture, it's like a sale and again it doesn't mean that you have to go all in right away, just because it's cheap oversold, meaning that it's cheap doesn't mean that it's a good buy, because it could continue to sell off. So what can you do approach it in a tasteful manner? So again, these are the three stages of a reversal position. Size is so important, and my goal with this video again is by watching your position, size and effectively investing in the stocks that you see value in that it will be that much easier for you to lock in profits when you do it with a tasteful position.
Size or worse comes to worst, it's part of the process. If you have to cut losses, but you do it with a much smaller position size. I just hope that it's a little bit easier for you. So let me know in the comments section what you guys agree.
I hope that i earned your thumbs up and, as the market is selling off, i would love to know what stocks are you watching right now? If you were to pick three stocks that you were to invest in for the next five years, what would those be i'd, love to learn a little bit more about them and hey, maybe i'll, even invest into them as well? I appreciate your time hope we earned your thumbs up, don't forget to subscribe to the youtube channel and, like always make sure you stay connected, join our free facebook group and that's that first link down below. And if you guys, like the way that i broke things down today, just know that i exclusively work with the learn plan. Profit group - i trade, live every single morning and i answer your questions in real time. There's no question that the market is always changing and it's not that it is necessary to take and make moves every single day.
But it's so cool to be able to surround yourself with people that are doing it on a daily basis and to know that every day at market open, i'm right there for you so again, click the second link down below to learn a little bit more about The learn plan prop group and see if it's a good fit for you, like always, let's make sure that we in the year on the green now take your daisy team.
The most difficult thing is when second stage lasts for months, and slightly drifting down, until many give up and reallocate, thats when the stage three begins.
Looking at CCIV, MMAT and AMC but again I’m just learning got into trading 3 months ago got lucky and now trying to learn as much thank you will continue my education great work
I found value in MARA, RIOT, and FSLY. I am very new and have a lot to learn, so I am sure my portfolio will change over time. This video was very helpful. Thank you!
If you buy the dip, you need to know the news before being confident in doing so.
Great knowledge. I'm 50ish and just started with the market. And have lost and lost and lost. I really want to learn from this guy. Tasteful, small profits, in 3-5 years I hope I can start investing 10k and make 2-5% per day.
Thanks Ricky!! I always hit that thumbs up before the video even starts. You are appreciated.
XPL is showing signs of consolidation at $0.70. With a high of $1.25 back in mid Feb 2021 can this can be potential for big gains?
Ricky got jacked. Drop the training/diet program Ricky 👏
So I havent read the comments yet but my 3 stocks are: GEVO KEYS and NOK.
I dont have enough space to tell you why but I'll try. GEVO litterally nothing since September 2020 yet still had money and loans for 2 huge plants they will be built in december 2021 and January 2022 NetZero1 is the plants names. KEYS honestly just cause of their forecast and their ambitions with 5g equipment. NOK cause they are litterally going to the moon. Look them up if you're interested.
Loved this video! More please. Helps me learn the market.
Ricky, can you also please do review on those Inverse Etf again. How you think about those after last week selling off? Thank you for that.
Investors should be cautious with decisions when trading against the market,personally i advise you watch the market trend for a while before buying stocks because all stocks are profitable until a market crash occurs
Don't plan on the V-shaped recoveries because they are rare. When stocks or indices drop they usually go sideways, and maybe come up and then down again, for a little while before making a strong move upward again.
The opposite of patience is anxiousness which has been my emotional problem.
I’m new to your channel, but this was a terrific video. You are an excellent presenter. Thank you. What am I watching right now? I’ll list a few I haven’t heard you mention in your other recent videos:
ENPH
LI
BST
SWKS
MESA
ARK K
Great video/explanation. I liked the "take profit" opinion too. Too many diamond hands losing out on locking in profit. 🙂
Would definitely like you to come up with a video of penny stocks and list out few which will do good in next few years.
Ricky it's higher lows, not lower highs. That's for posting a helpful video.
Hey Ricky, stop wearing T-shirt’s man. It’s really distracting (bicep pump ) lol
after free lesson, there will be paid webinars, or ebooks. learn yourself you will win one day
As I understand this, you're teaching a rebalancing strategy basically. So why should I even buy stocks then, if I can buy ETFs, which can rebalance better than I every could do it myself? + I would save a lot of time because the ETFs do it all for me.
So my question as someone who is still learning is "How long is it that we should observe the market before we make a decision as to what stage the stock is in ???"
Don’t sleep on $RLC on Coinbase that’s a project that did a collaboration with Google Cloud recently and SpaceX just did a collaboration with Google Cloud and $DOGE that’s going to be listed on Coinbase soon! Thank me later! 💰🤑🚀📈🤑🤑🚀🚀💰💰
I couldn't pay attention 2 anything you said I keep watching the TV in the background
Hi Ricky thank you for your video just want to ask an advice bec i was day trading tsla 2wks ago cost is 695 i got stuck on the first stage i did not know market /tsla would sell of for 2 wks and hopefully not longer am still holding as of today, and am thinking i might go down more hoping not less than 500, what is your advice just hold, and i hear a lot of people the real value of tsla might be just 300, is it just right to hold on and sell to come back and make profits, or will tsla just sell off and wont comeback to the highs sorry am a noob