8
The Money Flow and the Four Stages of Price Movement
The stock market goes up as much as 71% of the time . The problem is it is not a straight line . Price can only do one of three things. Move up, move down move sideways . I believe price does this in 4 stages. By identifying the stage, we can better allocate our buys to take advantage of sell offs (stage 4 decline) and maximize price increases to take profits in during a stage 3 distribution zone. YOU MUST MEMORIZE the pattern you see in this picture. You should see it in your sleep. It is the master key to understanding price movement, and The Money Flow Trading System.
The Money Flow Trading System is a trend follow strategy that hopes to capture the up trends and avoid, or downsize share size, and capitalize by shorting the down moves depending on your goals. This strategy is based on the belief that price moves in four stages and 71% of that move the S&P500 is in stage 2 breakout, the market up phase.
The Basic Money Flow Trading System Technical Indicator List
1. The 5 -day Exponential Moving average 2. The 10 -day Exponential Moving average 3. The 20 -day Simple Moving average 4. RSI – Relative Strength Index set to 14 days. 5. Support and Resistance Zones – Supply and Demand The MACD – Moving Average Convergence Divergence / or TSI
6.
Technical Indicators- MACD, TSI, Slow Stochastics, Moving Averages
What are technical indicators? They are heuristic or mathematical calculations based on the price, volume, or open interest of a security or contract used by traders who follow technical analysis. By analyzing historical data, technical analysts use indicators to predict the future.
What are Price Charts? Price is THE INDICATOR
A price chart is a sequence of prices plotted over a specific timeframe. ... Because charts provide an easy-to-read graphical representation of a security’s price movement over a specific period, they can also be of great benefit to fundamental research. The charts here were created with stockcharts.com
Subscribe to The Money Flow Trading Society Newsletter and Trade Updates
Made with FlippingBook - professional solution for displaying marketing and sales documents online