At the start of the year, it looked like the ASX 200 was finally breaking out of its two-year range.
It was short-lived.
The ASX 200 is up 2% since December 2023. Big whoop. That could disappear in a day’s trading.
That said, history shows a breakout is due.
When it happens, you want to be able to read the early momentum to trade it.
To do that, it’s handy to understand momentum and how it evolves over time.
If you have the patience to wait for momentum to be on your side you have a far higher chance of success.
If you can avoid battling weak momentum your stress levels will fall.
In today’s Closing Bell video I dive into an analysis of weekly momentum. I look at the ASX 200 going back a few decades using the MACD (Moving Average Convergence Divergence) indicator.
In it you will see how many great opportunities there were over the last few decades to join an upswing early.
You will also see how often you received an early warning sign that momentum was waning.
There isn’t an indicator in existence that will turn the trading game into a money making machine.
But there are indicators that can help you to trade with the market’s momentum and avoid the worst mistakes that many amateurs make.
Check out today’s Closing Bell video by clicking on the picture above and be sure to like the video on YouTube if it added some value to your day.
Regards,
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Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps
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