Profiting from the Lifecycle of Stocks: Strategies for Trading each Phase of a Stock Trend
Learn how to find the best trades by understanding the lifecycle of stock moves
Stocks tend to trend higher in three phases: accumulation, realization, and distribution. Top technical analyst Corey Rosenbloom shows how to identify each phase for any particular stock and, most importantly, how to construct strategies to profit within each phase. Rosenbloom's lifecycle approach to stock investing draws on the work of Richard Wyckoff, one of the greatest technical analysts in history.
In phase one, accumulation, professional investors begin building a position. While prices typically remain in a trading range in this phase, the telltale sign of accumulation is rising volume. If you're a long-term investor, this is a good place to buy; if you're a trader, you should wait for the breakout to go long.
Phase two, realization, has the greatest profit potential. Trend line breaks to the upside and pullback to support offer excellent risk/reward trades.
Phase three, distribution, is the trickiest of all to trade. Typically, prices continue to move higher, but divergences between price and momentum indicators begin to appear and price action can be volatile. Traders would be well-advised to trade cautiously or not at all during this phase. By being aware of which phase a stock is in, traders can pinpoint the most promising times to trade and avoid perilous situations. In this video, you'll learn:
- How to identify the lifecycle phase of any stock
- How to trade in each phase of a stock's lifecycle
- How to avoid situations where price action will be volatile and highly unpredictable
- How to trade with less stress and greater understanding
Drawing on classical technical analysis principles—updated for today's markets—Rosenbloom's approach will provide traders with a method to break down stock market price movements and trade with increased knowledge and confidence.