New book by Larry Connors Click here Improve your trading - See how
| TradingMarkets.com
One of the rules we have for trading stocks is to focus on buying stocks that are above the 200-day. Time after time, this has proven to be the best strategy to trade stocks. When stocks get under the 200-day, chaos often breaks loose. You only have to look at thousands of stocks in 2008 after they broke under the 200-day. Buying those stocks costs investors billions of dollars last year when investment advisors and fund managers kept buying those "cheap stocks" all the way down.
Over the past year there has been a smaller and smaller universe of stocks above the 200-day to trade. In fact, in early March the number got to under 60 stocks! This means if you are following the 200-day rule, you had very few long set-ups for the past year or so on the long side.
But like most everything else in the market, reversion to the mean kicks in and I'm happy to say that today there are over 500 stocks above their 200-day ma and the number has been rising consistently for the past 6 weeks. This means more stock set-ups and more trades on the long side which ultimately means more opportunity for profit. This is good news.
Reminder: I'm conducting a 45 minute presentation today at 4:30 pm on our Summer Swing Trading College which launches in a few weeks. If you are looking for high probability trading strategies for stocks, ETFs, options, and e-mini's, along with learning how to conduct your trading as a business, please call 1-888-484-8220 ext 1 and reserve your spot for today.
Larry Connors is CEO and Founder of TradingMarkets.com and Connors Research.
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The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
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