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The Water Cooler
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Damn I Should Have Invested in Ammo Companies...
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<blockquote data-quote="zghorner" data-source="post: 3499910" data-attributes="member: 35089"><p>based off of moving averages. when something is "strong" it is trending upwards above several moving averages 200, 50, and 20 day SMA. The price is steadily rising proving it to be trading with strength. In this case you would buy it because its steady price increase has proved it a winner thus far. You would be amazed how much money is made from buying high and selling higher (vs the old axiom: buy low, sell high).</p><p></p><p>To "sell weakness" means the same thing in reverse. a stock/commodity/etc...is trending downwards and is below all of the common moving averages...price decreasing more and more each day. At this point you would sell it short...meaning sell the stock on margin and you make money the further the price drops.</p><p></p><p>What often happens in the real world, especially with new investors...is they buy a stock because they got an email with a list of recommended buys...the price drops...proving it to be weak...but they BUY more to average down the price of their position...the price drops further...they buy more of the weak performer...next thing you know they are down 70% on their position and either freak out and sell, or tell themselves "this is just going to be a long term investment now" lol...Rule #1 is knowing the difference between trading and investing...if a trade turns into an investment then you messed up major.</p></blockquote><p></p>
[QUOTE="zghorner, post: 3499910, member: 35089"] based off of moving averages. when something is "strong" it is trending upwards above several moving averages 200, 50, and 20 day SMA. The price is steadily rising proving it to be trading with strength. In this case you would buy it because its steady price increase has proved it a winner thus far. You would be amazed how much money is made from buying high and selling higher (vs the old axiom: buy low, sell high). To "sell weakness" means the same thing in reverse. a stock/commodity/etc...is trending downwards and is below all of the common moving averages...price decreasing more and more each day. At this point you would sell it short...meaning sell the stock on margin and you make money the further the price drops. What often happens in the real world, especially with new investors...is they buy a stock because they got an email with a list of recommended buys...the price drops...proving it to be weak...but they BUY more to average down the price of their position...the price drops further...they buy more of the weak performer...next thing you know they are down 70% on their position and either freak out and sell, or tell themselves "this is just going to be a long term investment now" lol...Rule #1 is knowing the difference between trading and investing...if a trade turns into an investment then you messed up major. [/QUOTE]
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