Talk to any stock trader and they’ll explain the next breakout strategy to get rich quick. Everyone has a strategy, and theirs is always the hot new thing to watch out for.
But while new market metrics prove their muster on the trading floor, an intelligent approach always trumps new, overhyped market speculation models. This is best demonstrated in the modest, stable success of index funds year after year. The market has grown at an average rate of about 10 percent year after year for decades, and this trend will likely continue.
Sure, there will be some down years, but this downturn is actually beneficial to you as an investor. These receding stock prices are competitive buyers markets for those who know where to look. And with a smart reading of the market’s butterfly pattern, you will be ready for the next explosive movement, wherever it hits.
While modest returns are an important aspect of any trader’s portfolio, it is important to introduce aspects of risk into your repertoire to achieve higher rewards. Generally speaking, younger investors actually should seek out the most risk, even though they possess the least amount of investable capital compared to other demographic age brackets. This is because the younger they are, the longer they have to allow for market recovery. An elderly investor experiencing the dip in 2008 would see their life savings — which should be paying dividends in real time — completely evaporate. Younger investors, on the other hand, could afford to see their liquid savings assets dip and wait for the inevitable recovery without any worries, beyond simply seeing their total value dwindle before the next surge.
After deciding to engage your portfolio to net greater returns, the question then becomes how to access that risk. Primarily, you want to spread your portfolio across multiple market sectors and various stocks within those classifications. But how will you know which stocks to pick for your portfolio? This is where conventional wisdom frays into a million streams. Your friends and family will naturally give you tips on their favorite stocks, but in order to choose the right companies for your money, it comes down to reading the market. This means getting acquainted with a number of different stocks and keeping track of their price movements. Employing a reading of the butterfly pattern can be infinitely useful in this task.
The butterfly pattern is an easily recognized market metric that uses a candlestick visualization to graph out market fluctuations and predict an upcoming price movement trend. As a rule, these indicators often form what appears to the casual viewer as butterfly wings pointed either up or down, hence the name.
This pattern is a strong precursor to bullish or bearish movements in the market and can even be informative for investors looking for an edge in the forex market. In fact, this pattern rears its head here routinely as well, helping forex traders build huge profits every day. In the forex market, you can trade 24 hours a day during the week without trade execution fees. Couple this with the undulating changes that rock back and forth through the currency market in a never ending stream and you have a market ripe for profits.
Simple market spotting has helped many investors grow their nest eggs across multiple investment platforms for years. Don’t waste your time guessing about what the market might do next. Do your homework and share in the high yield returns.