I will say: Yes as Luck favours a good setup
Sometimes everything falls into the place just at the right time and results in a very profitable opportunity. Here's one example: Twitter stock on April 17, 2017
Is Twitter Value Buy?
The stock is at Ultimate support level pic.twitter.com/LCPjLz8w39
— Deepak Singh (@smarket) April 17, 2017
Logic back then: Twitter has built a great platform and it's not going to disappear. The stock has come down to a level from where it always bounces. It appears worst is in the price but nobody can say for sure. If the stock cracks this level, then I will exit with minimal damage. But what if this is the absolute bottom?
Here's what has happened to the trade since then - The stock is up 80% since then (9 months)
The above chart is a great example of how one can make extremely rewarding trade by buying stock at an absolute bottom. The Logic: It cannot get worse than this but if it does: You have Stop Loss 🙂
Science of Stock Price Action
The Business of Investing is not same as Investing in business. You have to know how stocks make a move and try to capitalize on that opportunity. It means following fundamental newsflow and its impact on Price Action.
Price Action is one of the best ways to make good investment decisions. That's what I teach all the time.
If you find Price Action fascinating - then Science of Stock Price is a good place to start. It's a website designed to help you learn various Price Action concepts.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers