The SRS Power Signal™ Makes All The DIFFERENCE

The harsh reality of stock trading is that a trend is not easy to recognize until it has already made a fairly significant advance. At the point of recognition it's pretty darn tough to pick an entry point.

Most traders solve this problem by attempting to buy the pullback. The problem is pullbacks oftentimes fail and pullbacks are difficult to time. In essence, if it were really just that simple everyone would be trading pullbacks and using the stock market like an ATM machine.

We are all grownups here. We know that buying pullbacks is a difficult endeavor and that most who attempt it fail more often than they succeed.

A Better Way To Enter Pullbacks

What is needed is a better way to determine which stocks have the potential to resume the trend after a pullback from those stocks that turn out to be dogs. What is needed is a better way to time an entry point.

The Setup

1. The ADX Indicator Is Above 35: The ADX stock indicator measures the rate of the trend. Stocks with an ADX that is above 35 are trending very fast.  

2. The Trend Has Stopped For A Rest : Pullbacks can take place in one or both of two ways, price and time. The strongest stocks experience shallow pullbacks and some just trade flat for a few days. Look for stocks that have stopped advancing and have entered an area of congestion.

3. Confirmation Is Given With A New High Or New Low: Confirmation is the most important factor in the SRS Power Signal™. Until the price actually breaks out the probabilities of getting the trade right are essentially random.

This is where most traders mess up. They try and anticipate the breakout in hopes of getting a better price. Unfortunately they pay for their stinginess many times over in failed trades. Probabilities of success increase many fold following confirmation.

Stop Loss Placement : After entry, place a stop below or above the previous day's high or low (depending on whether you are buying or going short).