Buying Bottoms & Identifying Confluence
The anatomy of a stage 4 becoming a stage 1 the Money Flow way.🌊
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"The stock market is a device for transferring money from the impatient to the patient." – Warren Buffett
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The market looks to have put in a bottom here for now.
I’m watching closely for an anchor point, sideways price action, and price to get above its 5-day EMA, my trigger, to confirm the stage 1 accumulation zone.
Today's message is about confluence and buying bottoms.
This is super important to recognize during this current market correction.
-GP a.k.a Fullauto11 🧙🐼
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You must memorize and understand The Money Flow pattern and 6 main technical indicators in the photo above.
Buying Bottoms & Identifying Confluence
Confluence is the occurrence of multiple technical analysis indicators aligning at a specific price level.
Once a potential anchor point is established, The Money Flow wants 3-4 additional bars to confirm the new anchor point.
Once the possible anchor point is formed, we should see the MACD histogram change slope direction letting us know that momentum is turning to the upside, along with price above the 5-day EMA (the trigger), an extreme RSI, and the moving averages coming together.
This is a confluence between price and the indicators.
Again, we want to be able to catch the anchor point, identify the bottom, and see price above the 5-day EMA to enter the trade on a stage 1 accumulation zone.
Never be in a rush in the stock market. Let the setups come to you and trades mature.
This is my video about pinpointing the bottom of a structured price move.
The Money Flow is simple and a stage 1 should be clear.
We should see a confluence of the indicators and a visible repeatable pattern that can be spotted by the human eye. This gives us our edge.
The 4 stages of price movement and the fact that quality assets go up 71% of the time is our edge.
Always be able to define your trading edge.
According to Mark Douglas, one of the greatest traders in the world, "an edge is nothing more than an indication of a higher probability of one thing happening over another."
Our edge is backed by numbers and statistics.
The Money Flow Trading System gives us the discipline and confidence to make bold moves in the stock market.
Always remember, whatever you think about comes about, whatever you focus on grows. - GP 🐼🧙🤘
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Always remain bullish and follow The Money Flow.
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Thanks, GP!!
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