One Principle to Improve Your Trading

By Murray Dawes, Saturday, 15 June 2024

Using weekly MACD to read the markets

In today’s Closing Bell, you need to understand how momentum in stocks works. Why? So you can ensure you trade when momentum is going in your favour! In today’s Closing Bell video, Murray shows you how to read weekly momentum in the ASX 200 over the past few decades, to help you with your investing decisions.

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,

Murray Dawes Signature

Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

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Murray Dawes is our resident expert trader and portfolio manager. He is a former Sydney Futures Exchange floor trader who went on to design custom trading systems and strategies for ultra-wealthy clients (including one of Australia’s richest families). Today, his mission is to help ordinary Aussie investors make profitable investments, while expertly managing risk.

He uses his proprietary system for his more conversative and longer-term-focused service Retirement Trader…and then applies the same system to the ultra-speculative end of the Australian market in Fat Tail Microcaps (this service is strictly limited and via invitation only).

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All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.