In the fall of 2018, I signed up for a class called "Introduction to the Stock Market and Technical Analysis" taught by Dr. Eric Wish
This class changed my life.
Here are 10 Lessons Dr. Wish taught me from his over 50 Years of Trading.
(Thread)
This class changed my life.
Here are 10 Lessons Dr. Wish taught me from his over 50 Years of Trading.
(Thread)
Before this class I had absolutely no knowledge about investing, trading, or how to read a stock chart
Today, trading & studying the commonalities between the greatest performing stocks is my passion, and what Iโve spent the past 1000+ days focused on
Now onto the first lesson
Today, trading & studying the commonalities between the greatest performing stocks is my passion, and what Iโve spent the past 1000+ days focused on
Now onto the first lesson
Financial Literacy
The first lesson Dr. Wish taught me was the importance of overall financial literacy.
Roth IRAs, interest rates, budgeting, building credit the right way.
You need to master money management before thinking moving on to trading/investing.
The first lesson Dr. Wish taught me was the importance of overall financial literacy.
Roth IRAs, interest rates, budgeting, building credit the right way.
You need to master money management before thinking moving on to trading/investing.
Overall Strategy
Throughout the class, Dr. Wish repeated his trading mantra.
As you gain trading knowledge and experience, you'll appreciate the simplicity and depth of this one sentence:
Throughout the class, Dr. Wish repeated his trading mantra.
As you gain trading knowledge and experience, you'll appreciate the simplicity and depth of this one sentence:
Determine the Market Trend
The vast majority of stocks follow the overall trend of the market. This is why the mantra begins with โIn a Rising Marketโ
"At least 50% of the whole game is the general market."
-William O'Neil
The vast majority of stocks follow the overall trend of the market. This is why the mantra begins with โIn a Rising Marketโ
"At least 50% of the whole game is the general market."
-William O'Neil
To determine the trend, Dr. Wish taught us how to use moving averages to visually identify Uptrends, Downtrends, & Basing Patterns.
For instance, using GMMA charts & looking for strong Red-White-Blue Patterns
This keeps you in uptrends and protects you during corrections
For instance, using GMMA charts & looking for strong Red-White-Blue Patterns
This keeps you in uptrends and protects you during corrections
Dr. Wish also has his GMI Indicator which incorporates several criteria to determine the health and trend of the market.
He posts the GMI daily at wishingwealthblog.com
He posts the GMI daily at wishingwealthblog.com
Stage Analysis
One of Dr. Wishโs major influences is Stan Weinstein, veteran trader and the author of Secrets for Profiting in Bull and Bear Markets
Early on in the class we learned to identify stages and why you should only focus on Stage 2 Uptrends & avoid stocks in Stage 4
One of Dr. Wishโs major influences is Stan Weinstein, veteran trader and the author of Secrets for Profiting in Bull and Bear Markets
Early on in the class we learned to identify stages and why you should only focus on Stage 2 Uptrends & avoid stocks in Stage 4
The Big Money is made in stage 2 Uptrends and the Big Money is lost in Stage 4.
Price action, along with the weekly 30 MA as a reference point, determines the stage of a stock
Here is an example with $ROKU
Price action, along with the weekly 30 MA as a reference point, determines the stage of a stock
Here is an example with $ROKU
Stage Analysis:
Stage 1: Price chops around after a decline. 30 MA flattening
Stage 2: Price breaks out & trends above a rising 30 MA
Stage 3: Price chops around a flattening 30 MA. Price Action is wide and loose
Stage 4: Price breaks down & trends below a declining 30 MA
Stage 1: Price chops around after a decline. 30 MA flattening
Stage 2: Price breaks out & trends above a rising 30 MA
Stage 3: Price chops around a flattening 30 MA. Price Action is wide and loose
Stage 4: Price breaks down & trends below a declining 30 MA
Green Line Breakout
The Green Line Breakout is one of Dr. Wishโs go-to setups.
It takes place as a stock makes a new all time high, bases for 3 or more months, and then breaks out above that prior high.
The Green Line Breakout is one of Dr. Wishโs go-to setups.
It takes place as a stock makes a new all time high, bases for 3 or more months, and then breaks out above that prior high.
Risk management
Iโm very lucky that my first exposure to the market was from someone who emphasized capital preservation and the importance of cutting losses quickly using stop losses.
Iโve naturally been pushed to cash protecting myself from every major correction since 2018.
Iโm very lucky that my first exposure to the market was from someone who emphasized capital preservation and the importance of cutting losses quickly using stop losses.
Iโve naturally been pushed to cash protecting myself from every major correction since 2018.
Write Trading Rules
Every student coming out of the class developed their own set of trading rules addressing:
Market Analysis
Stock Selection
Entry and Exit Rules
Position Sizing
Risk Management
This is an exercise that I would recommend every new trader take part in.
Every student coming out of the class developed their own set of trading rules addressing:
Market Analysis
Stock Selection
Entry and Exit Rules
Position Sizing
Risk Management
This is an exercise that I would recommend every new trader take part in.
Analyze your trading
Post Analysis is another habit I learned from Dr. Wish.
We should constantly be studying our trading results, analyzing weaknesses, and creating rules and systems to improve.
I would recommend doing this often, at the VERY least yearly.
Post Analysis is another habit I learned from Dr. Wish.
We should constantly be studying our trading results, analyzing weaknesses, and creating rules and systems to improve.
I would recommend doing this often, at the VERY least yearly.
Read the Best Books
As a part of the class we read
1. How I made 2,000,000 Dollars - Darvas
2. How To Make Money In Stocks - O'Neil
3. Trade Like a Stock market Wizard -MM
4. Think and Trade Like a Champion -MM
Full list of recommended books ๐
tradingengineered.substack.com
As a part of the class we read
1. How I made 2,000,000 Dollars - Darvas
2. How To Make Money In Stocks - O'Neil
3. Trade Like a Stock market Wizard -MM
4. Think and Trade Like a Champion -MM
Full list of recommended books ๐
tradingengineered.substack.com
Yellow Band Patterns
Another way Dr. Wish looks for high potential stocks is by looking for stocks in strong yellow band patterns where the stock is trending above increasing 10 week & 30 week moving averages
Then you look for consolidations and pullback buys within the uptrend
Another way Dr. Wish looks for high potential stocks is by looking for stocks in strong yellow band patterns where the stock is trending above increasing 10 week & 30 week moving averages
Then you look for consolidations and pullback buys within the uptrend
Bonus: Entry Setups
Dr. Wish looks for a bounce off of support, a lower 15.2 Bollinger band, or a 10.4.4 stochastic cross in an already strong & trending stock.
Ideally this stock also has the CANSLIM characteristics with strong RS and Earnings/Sales.
Dr. Wish looks for a bounce off of support, a lower 15.2 Bollinger band, or a 10.4.4 stochastic cross in an already strong & trending stock.
Ideally this stock also has the CANSLIM characteristics with strong RS and Earnings/Sales.
Bonus 2X: Donโt Listen to the Noise
One of the specific things that Dr. Wish taught me and his other students was to avoid the noise.
Donโt watch CNBC, donโt listen to pundits, predictions, profit targets.
Focus on the chart, what the current trend is.
Follow your process
One of the specific things that Dr. Wish taught me and his other students was to avoid the noise.
Donโt watch CNBC, donโt listen to pundits, predictions, profit targets.
Focus on the chart, what the current trend is.
Follow your process
If you are interested in learning more about Dr. Wishโs style I would highly recommend subscribing to his free blog wishingwealth.com and watching his full presentation from the 2021 @TraderLion_ conference
youtu.be
youtu.be
Also, I would like to take the time to mention and thank David McCandlish, Dr. Wishโs co-instructor who passed away earlier this year.
David was an essential part of the course and helped hundreds of students learn about trading and financial literacy
wishingwealthblog.com
David was an essential part of the course and helped hundreds of students learn about trading and financial literacy
wishingwealthblog.com
I hope your found this thread helpful!
If you did:
1. Follow @richardmoglen & @WishingWealth
2. Share this quoted tweet with your audience ๐
If you did:
1. Follow @richardmoglen & @WishingWealth
2. Share this quoted tweet with your audience ๐
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