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Anatomy of a Great Trade: The AMZN IPO

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JULY 28 2023
 
   
SCOTT WELSH’S ANATOMY OF A GREAT TRADE
A Long Term View Could Have Helped You Get In On AMZN For Dirt Cheap
 

When studying great trades from the past, it’s a good idea to look back on the greatest stock of our generation: Amazon (AMZN).

From the late 1990s to now, nothing has performed like AMZN.

But was it possible to trade it at the beginning?

Could we have participated in the initial surge?

More importantly, could we have participated without insider knowledge, detailed future earnings predictions, and watching the news and the charts every second?

Let’s take a look. 

Here’s the beginning of AMZN on a Monthly chart:

 
 
On the far left side, you see the massive run-up from around $0.37 to over $5.00. That’s during the biggest bull run of our lifetimes (the Dot-Com Bubble), when every internet stock went to the moon.

It would have been very hard to buy it then. By the time the 12-month simple moving average (SMA) showed up, AMZN was already moving. We might have been able to try a trade in the fall of 1999 (on a pull-back), but it would have been tough to justify and scary to take.

Then, of course, the Bubble burst and AMZN almost went to zero. It was actually about a month away from ceasing to exist. Imagine it: a world without Amazon.

By the time the sell-off was over, AMZN wasn’t hot anymore. And no one wanted it.

But it made the exact pattern we like to see and it started moving up in late 2001.

Then, we got what we wanted.

January and February of 2002 both closed above the SMA, and we could’ve entered at the open of the next month. 

If we did, if we waited for the setup we like on IPOs, we then could have ridden a 200% winner until March 2004.

Trying to react to news and action can be tough.

Following a method is much easier. 

And can help us find nice winners.

Happy trading,

— Scott Welsh

P.S. As a reminder, these historical lookbacks are based on my longer-term Weinstein Stage Analysis method. The charts above use monthly candles and a 12 month simple moving average. For details on this method, see my explanation on this Ask The Pros episode starting at timestamp 20:45.
JEFFRY TURNMIRE
Exploiting The Wall Street Bots
 

Picture Wall Street for a moment. What do you see in your head?

Most likely, you think of bustling traders yelling buy and sell orders.

But the reality is quite different these days. Wall Street has taken a quiet turn, thanks to the rise of the robots — the trading algorithms or 'bots' that now dominate the financial landscape.

So, what are these Wall Street bots?

Think of them as tireless traders, working at lightning speed, following a set of pre-determined rules. These rules, or algorithms, dictate when to buy and sell securities based on factors like price, time, volume, and other market conditions.

By using bots, Wall Street can make thousands of trades in the blink of an eye — something no human trader could ever hope to do.

Why does Wall Street love these bots so much?

There are many reasons. First off, these bots are efficient — they can take in vast amounts of data and execute trades in fractions of a second. This speed gives Wall Street an edge, allowing them to seize opportunities the moment they arise.

Second, they eliminate human error. Bots aren't influenced by emotions like fear or greed, which can often lead traders to make poor decisions. They stick strictly to their set of rules, executing trades only when specific conditions are met.

Another reason is that bots enable a strategy called high-frequency trading, where they make a large number of trades at very high speeds. This can result in significant profits over time, even if the profit on each individual trade is small.

Wall Street's deep pockets allow them to invest heavily in developing advanced trading bots and refining their strategies over time. This gives them a significant advantage over individual traders like you and me.

But even though Wall Street has gobs of money, nearly infinite computing resources and mountains of time…

They have one small problem.

I’ve discovered a small flaw in one of their trading bots that has allowed me to make 52 straight winning trades without a single loser…

Now, I’m not saying that will continue forever. But for over a year, this “glitch” has worked out for me and my readers.

I’m going LIVE on Monday, July 31st to share all the details about it.

But if you want to get some info to read more about it over the weekend, just click here and enter your cell # after you register your email address.

— Jeffry Turnmire
   
 

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