due diligence and your findings
support a high-probability rocket ship
stock, but then you notice that the
consensus amongst the analysts is a
“hold”…this could be the set-up for a
future catalyst. How, you might ask?
If everything else is equal and your
findings support a good buy, and then
later the analysts begin to revise their
ratings from a “hold” to a “buy”, this
typically serves as a catalyst to help
catapult your stock’s valuation to
new heights.
low risk/high reward opportunities will
increase.
Regardless of whether you are a short-
term trader or long-term investor, to
effectively recognize price patterns and
distinguish between ‘major’ and ‘minor’
reflection points of supply and demand,
it is important to use multiple time frame
analysis. This
means viewing a
chart from not only
a standard one-
year time frame,
but looking at all
major time frames
including a 20-year,
10-year, 5-year,
and 3-months, and
various intra-day
charts.
5. Earnings and
Conference Calls
There is much that you can learn by
listening to the company’s conference
call. You will find out not only the
company’s outlook and possible con-
cerns, but you will also uncover what
is important to the analysts. The
questions being asked could signal a
trend of what the analysts are seeking
and provide insight to you as an
investor of what is really important.
Listen to how the executives handle
the questions….are the questions
handled with confidence? Are there
other companies in that group that
perhaps have a better foothold on
the trend of interest to investors and
analysts? Listening to the earnings
call or reading the transcript is key in
this process of becoming a successful
investor or trader.
Viewing a chart utilizing multiple time
frames will ensure that you gain a better
understanding of key pivot points and the
major and minor waves of a chart. This
helps you to make better decisions on both
your entry and exits.
7. The Plan
One of your finals steps before placing the
trade is to plan your entry, your exit, and
the strategy you intend to utilize that will
not only help increase your probability
for success, but also eliminate as much of
the risk as possible. Architecting a trade
with the idea of reducing your exposure
and providing the highest reward is the
true sign of a Master Trader.
Follow the 7-steps outlined above and
you should see a higher degree of success
in the market and come closer to
your pursuit of trading for a living.
v
Bruce E Dinger is an Investment
Advisor for private qualified
clients and also a world-class
educator in the stock and options
market. Be sure to register for a
live webinar or upcoming event at
www.KTCashFlow.com
Mr. Dinger has spoken on some of the
largest stages around the globe, includ-
ing CNBC, BusinessWeek, SuccessMaga-
zine, The Women’s Financial Conference,
Rich Dad’s, On-Line Trading Academy,
Success Resources, and many others.
He has one of the best reputations in the
financial markets for helping students
achieve their goal of becoming an inde-
pendent trader or investor.
Dinger can be reached at
[email protected]
6. Technical Analysis
After all due diligence has been
completed, one of the true barometers
of the market’s interest in a stock
is “Price Action”. The supply and
demand of a company is ultimately
reflected in the price. An investor or
trader of the market must learn how
to recognize KPPs (key pivot points)
that reflect the emotional patterns of
market participants. As you become
more familiar with the price action,
price patterns, support and resistance
areas, and other technical aspects of
chart reading, your ability to effec-
tively manage your risk and identify
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