Chapter 3. Spotting Trends
Buy low and sell high. Boy, that sounds easy, doesn’t it? But if you’ve tried it, you know that it can be next to impossible to accurately do 100% of the time—and it really can’t be done without a whole lot of stress.
Wouldn’t it be great if instead you could somehow see when a trend might be coming or going? That way, if an uptrend developed, you’d know you had the green light to allocate assets. On the other hand, if a trend turned negative, you could avoid potential serious losses by selling early in the downswing.
Good news! It’s possible. You can use moving averages—particularly the 200-day moving average—to monitor trends and make wise investment decisions. I’ve been using this strategy for years without ...
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