First Thrust Down Pattern
February 22nd, 2010 at 2:00 pm Posted by
If you want to be successful in trading penny stocks, you need to be able to recognize patterns in the market when they happen. These will help you to understand when the time comes to buy or sell. And in the case of the latter, the first thrust down pattern is crucial.
You will normally see a first thrust down when a stock drops in value after a period of climbing. But if you look at the charts that are relevant to that stock you will see that the thrust downwards is usually followed by a recovery. This is a key point to remember.
Being able to read the charts like this is crucial to enable you to know when you should invest in a certain stock. If you spot the first thrust down pattern keep a close eye on it. You will probably then see people selling that stock to get rid of it as it loses value. Keep an eye on the percentages too – you will sometimes see quite a pronounced loss in a very short space of time.
If you hold a stock and you see it start to move downwards instead of heading up or holding steady, you should seriously consider selling it to avoid any losses. The first thrust down pattern – if it follows – will certainly result in losses if you still hold it.
But what if you don’t hold that stock?
Keep a close eye on what happens as the thrust downwards takes place. Look for the end of that trend and think about buying at that point. It is difficult to gauge when the lowest point is, but watch for things to start going back up again. You should then be able to buy into the stock and hang onto it for a short period while it improves. Then sell up and reap a small profit.
The easiest way to understand how this works is to constantly study the charts for various stocks. Become familiar with the moves and start trying to gauge what will happen next. When you become good at spotting the first thrust down you can think about buying or selling at the appropriate point.
This pattern is relatively easy to see once it gets underway. And as such you can use it to make small and quick gains when you are in the right position to do so. Watch for the first thrust down and take action.
If you would like to do more homework on how to spot and benefit a first thrust down patter, you can also check out the following links:
