Every trader should know the four stages in the stock market

To trade stocks successfully, you must first understand the four stages in the stock market, individual stocks and the overall market in that pass. These cycles will tell you if you need to be long, short or hold a position.

Once you are able to specify what stage you can trade accordingly with these characteristics.

After a while you will not even have to think about whether you need to be long or short. You will know without a doubt exactly what should be done now, find long positions, short positions, or stay outside the market- only looking at the chart!

These are the four stages through which pass the shares. This happens in all time frames whether it's monthly, weekly. daily chart or diagram of the day.

Now, we will examine the characteristics of the four stages in the stock market.

First stage (Stage one)
Stage horizontal movement after an extended downtrend. Sellers who once had the upper hand now begin to lose their power because buyers begin to appear more aggressive. The shares are in range with no clear trend. Everyone hates those shares!

Second stage (Stage two)
Shares finally burst in and began Stage 2 uptrend. This is where you make most of the profits from the stock exchange. But here's the funny thing: Nobody believes pulse! This is because everyone still hates shares. The foundations are bad, the outlook is negative, etc. But professional traders know better. This creates stage 3.

Third stage (Stage three)
Finally, after the glorious advance of the second stage, the shares started to trade sideways again and started "wait" pulse. This stage is very similar to Phase 1. buyers and sellers move in equilibrium. Now the shares are ready to begin the next stage.

Fourth stage (Stage four)
This is the most awesome downtrend. The basics are probably still very good and all still do not want to part with their shares. They think that the downtrend is just a "correction". Error! They hold and hold and hold, hoping that it will turn up again. They probably bought at the end of Stage 2 or Stage 3. During Unfortunately, you lose. Sell!

The stages in the stock market occur in any time frame for each chart.
Overall, my stay outside the market when a share is in the first stage. In the second stage you will want to make an aggressive focus on long positions. In the third step, it must also be out of the market. In the fourth stage, must be aggressively focusing on short positions.

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