I looked through dozens of charts looking for a market that was doing something interesting this week and came up empty handed.
So I thought it would be a good opportunity to make a video that would educate new Closing Bell viewers about the way I approach trading and investing.
I’m sure some people who watch my videos for the first time are left scratching their heads wondering what on Earth I’m going on about.
If that’s you, then I ask that you spend the time to watch today’s video so you can understand some of the nuts and bolts of my method.
On 3 June last year I sent out a Closing Bell titled ‘A US stock to add to the bottom drawer’. That stock was Spotify Technology [NYSE:SPOT]. I’d recommend watching the Closing Bell from 3 June before checking out today’s update so you can see what was said when I recommended the stock.
I only gave the tip to people who watch Closing Bell because I don’t trade international stocks in my trading services.
Spotify was trading at US$153 at the time and I said that my first profit target was US$244.
Spotify hit $244 last week, so I thought it made sense to revisit the trade and look at my reasoning behind the tip and why I thought the odds of hitting US$244 were high.
I also use a risk management technique that involves selling 1/3 of a position at the initial target and adjusting the stop loss to a breakeven level. There are a number of reasons why I do this which I explain in detail in the video above.
So if you remain a sceptic of technical analysis and think it’s all hocus pocus, hopefully I can convince you that technical analysis is a great risk management tool that helps you to plan trades in a methodical manner.
And don’t forget to ‘like’ the video on YouTube!
Regards,
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Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps
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