When stocks reverse down


What goes up must come down & vice versa

  1. Stocks move in Uptrend, Downtrend, & Sideways Trend.
  2. Spotting for an uptrend stock is important for an investor/trader to make profits out of it.
  3. But how many times have we ended up chasing high on an uptrend stock and ended up catching its reversal all the way down?
  4. What do we do when we are caught up in this situation? Buy more? Sell to protect profits/capital?

“The trend is always your friend until it starts to bent”


[Uptrend Cycle]

  1. Long Term Investor gain the most out of this as they have the patience on holding power.
  2. Mid Term Investor/Trader gain the most out of this as they have the patience on holding power.
  3. Short Term Trader gain as well on trading on each price retracement all the way up!

[Downtrend Cycle]

  1. Long Term Investor lose the most as they are literally holding onto a downtrend moving stock.
  2. Mid Term Investor/Trader lose the most as they are holding onto a donwtrend stock that can potentially last for months.
  3. Short Term Trader may potentially gain from this as they trade for its rebound movement instead.

When a Downtrend Cycle is spotted

  1. You have to start to be rational enough to act on your portfolio to sell for profits and to sell for capital protection.
  2. You will not buy nor average the price down thinking that is the lowest point.
  3. Until its evidently proven in your Technical Analysis a Trend Reversal (Uptrend Cycle), then you ACT!



William Au

10 Years Position Equities Trader

Founder of http://www.trendfollowingmalaysia.com

Chief Equities Market of TFM