BPA is a great example of buying strength. Thanks to Bumblin Bob for bringing it to my attention.
Professional traders focus on breakouts. The Novice focuses on bottom fishing. The novice may end with their share of winners, but the professional does it in a much shorter time frame and is then able to compound the number of winners they select.
Time and Space.
These are two of the most important words to a professional trader.
When is the timing right to enter the trade and in what span of time does price make the move?
Studies have shown that 70% of a price move comes in just a 30% time frame. Weinstein, in his book "Secrets For Profiting In Bull Or Bear Markets" calls this the Stage 2 portion of a price move.
Stage 2 is the Advancing Stage.
This is the stage where where the price starts advancing, the volume picks up and the moving averages start rising. This is the stage that captures most of the price movement.
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With a short term buy set up, it all begins with the moving averages. It starts with a rising 20 day moving average above a rising 50 day moving average, with a comfortable distance between the two. This is called a BULLISH ALIGNMENT. And, when you have a Bullish Alignment, you look for opportunities to go long.
The next step is to look for a break out after a period of price consolidation. In January, price formed a 2 1/2 week consolidation and then broke out to a new price high. The move must be accompanied by above average volume, preferably at least 50% above average. BPA did this.
Now this is important!
Breakouts on huge volume are driven by professional money!
The novice is afraid to buy break outs. They think price is extended or overbought. The novice isn't paying attention to the law of supply and demand.
Why do breakouts present great buying opportunities?
BLUE SKY!
When you have a break out, there isn't any overhead supply waiting to come to market. Overhead supply is represented by every person who is holding a position and losing money on it. Those people are praying for price to come back up to their entry point so they can sell and get out even. They are half of the supply vs demand battle.
When price breaks out on huge volume, without any overhead supply, the price move is demand driven. Demand pushes price higher in a very short time frame.
That's what professional traders look for. Stage 2 stocks that are going to provide the huge returns the novice is looking for, but in a much shorter time frame. Repeating their success over and over again is vital to the professional. Therefore, TIME and SPACE is critical to the success of the professional trader.
Timing is the when. The when is price breaking out when you have a Bullish Alignment.
Space is the amount of time you want to give the move. The shorter the time frame, the better, so you can repeat the process over and over again. Professional traders don't want to wait years to capture big moves. They are willing to do it in a short term time frame.
Here is the blueprint for 100% moves in a short period of time!
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