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VIDEO LESSON #1 – HOW I GAUGE THE MARKET AND WHEN I’M CONFIDENT IN BUYING FOUS4 STOCK PICK BREAKOUTS

I’m goin to start doing 2-4 video lessons/week. So here we start @ video lesson numero uno. How i gauge the market sentiment. And how  i change my approach to the FOUS4 strategy under certain conditions. Basically in a nut shell. Stock picks fitting the FOUS4 strategy are much more consistent, common, and make bigger moves when the DOW is trading >13ema. When the DOW is trading <13ema then i typically downsize my positions, take profits faster, and keep stops very tight. The reason being is that when the market is trading below the 13ema. The short term trend is bearish. When bears control the market, that means there is fear. Fear = irrational trading and extreme volatility. Thus breakouts can typically be very short lived. So take that small profit while you got it. And cut your loss short because its probable you just bought into a false breakout.

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  • Mike

    Yup, the short EMA weighted average against the longer MA (what r you using… a 50 for long term) gives a good indicator off general mkt mood. A prudent way to watch the larger pic while trading short term spec stox.

    Have you compared the DJIA vs: the SPY for similar signals?

    • fous

      no not really mike. But im sure its fairly similar signals as the DOW, SP, NASD, all follow eachother relatively closely.. I’ve just always been a follower of the DOW so its what im familiar with. 

  • Patti

    How do you apply this to your intraday trading?  For instance, today, 3/12/13, the DOW stayed above the 13ema on the daily chart, but went above and below during the course of the day.