dani-shay dani face dani quote
dani-mobile

Using market lows to make account highs

The only thing we can count on with certainty when it comes to the stock market is its ability to ebb and flow. And though we expect the market to go up and down, we as traders need to decide how to handle this kind of movement — at highs and at lows.

I feel confident when I say most traders love a bullish market (I know I do!). I mean, who doesn’t like waking up each day watching the market break new highs? But, as we know living in a bullish market isn’t always possible and what comes up must eventually come down.

Cue a market crash…

Now, all of a sudden people aren’t feeling so great and emotions are running high. It’s in these moments that we as traders have to decide whether to listen to our ‘fight’ or ‘flight’ instincts. 

The moment the market drops, lots of trader’s first thought is to go short, sell off their contracts, take what they can out of the market, and stay out until the market begins to right itself again. (Even in a market as strong as this, we still have down days!) But what if we can curb that natural instinct of panic and stay in — or find great opportunities, knowing there’s huge potential gain. How? By finding the phoenix among the ashes.

What’s a Phoenix?

In mythology, the Phoenix is a bird that’s notorious for burning profusely and being reduced to ashes only to be reborn and make a comeback. Likewise, we can use this analogy when it comes to stocks in the market. As I’ve already said, the market loves to ebb and flow, and though a certain stock is down one day, that doesn’t mean it can’t come back bigger and better than before. It just means that when ‘winning’ stocks fall, you can buy them at a discount.

Steps to Finding Your Phoenix

Now, buying a winning stock at a discount only for it to go back up again sounds like a dream come true, but how can we make sure the stock we pick is a ‘winner’ in the first place?

I do this by using my “Finding Phoenix” method.

The market’s huge so in order to help myself narrow down all its moving parts, the first step is to take a look at it as one big picture. We have equities, bonds, currencies, metals, and commodities to consider. From there, I pick which sector I want to focus on. Which sector has the most strength? Which has the most weakness?

After I’ve decided on which indexes I think have the most strength, I further break them down into sector groups and industry groups. Then, I repeat this process once again on a smaller scale by pairing them down to specific stocks that I want to buy or trade. From here, it’s much easier to study the flow of money between the sectors you’re considering… and ta-da! You’re on your way to finding your phoenix.

How Do I Identify Phoenixes in Today’s Market

This year, the market has been different than most due to COVID-19. So I decided to update my watchlist. I started out like I normally do, looking at the big picture. I weighed the pros and cons and landed on equities.

From there, I separated them into S&P, Nasdaq, Dow, and Russell. After doing this, my focus narrowed to the Nasdaq because I’ve seen major potential in the tech sector. After that, I broke it down more, looking at cybersecurity, cloud, and work from home leaders.

Then, I end up with a whole watchlist of cloud stocks.

And I can tell which cloud stocks are the strongest because I broke down the market into manageable pieces and compared them against each other’s performance, which led me to sound conclusions. I created a tool, called the Phoenix Finder, that allows me to compare the strength of the trend — and helps me quickly identify which stocks are the best! This my friends is how I select my options trades — or long stock buys.

How Can You Use “Finding Phoenix?”

Option One: Learn how to do it yourself! The great thing about Finding Phoenix is that the method is completely customizable and easily adaptable to the ever-changing market. If you want to look at credit card companies or gold miners, you can use the same process! As long as you start from the big picture, you can widdle down each market segment to craft specific and deliberate watchlists, and by the end of doing so, you’ll be waiting for the next market dip in giddy anticipation.

To get started you can download my free Finding Phoenix PDF here.

Option Two: Let me do the heavy lifting for you!

If you REALLY want to dive in, check out my full class, ‘Finding Phoenix’ (tool included). During this class, I teach the full strategy and give you the end result, the watchlists, and the tool I use to pick my trades. I’ve taken my time to craft watchlists that I use every day for my own trading. 

These lists include:

  • Millennials love it 
  • Tech 
  • Cloud kings
  • Homebuilders
  • Cybersecurity 
  • Debt Bubble

With the full class comes my proprietary tool, along with my custom watchlists, and my most recent July 2020 COVID-19 Winners watchlist was JUST added.

This list includes some favorites, like Peloton (PTON), Etsy (ETSY), Wayfair (W), Spotify (SPOT), and more! If you want the full list, along with my tool, class, and complete set of watchlists, click here. 

But, promise me — that at the minimum, you’ll get started looking for your favorite Phoenixes with the free download! Tell me below what’re your favorite Phoenix stocks you always look at to rise from the ashes?

1 thought on “Using market lows to make account highs”

  1. The Phoenix Finder is a really useful tool. The first thing I learned from it that I didn’t “see” prior to using it was “aha” -the market moves all together…when it’s down, a lot of equities will be down and vice versa…seeing the color trends helped me to stop the having to feel paniced over price movement…I was able to recogize the money flow in the markets and this was a big step towards helping me gauge whether my trading strategy was intact or was something else in play. The Phoenix stocks watchlists are the next best thing…I also created Phoenix watchlists in Tos columns, so now I can quickly scroll through my watchlists and instantly compare the trends…like today…red, red, red all over, except…look how much green in on the financials watchlist…this tells me where the money is flowing and from there I can follow up ..and search for the Phoenix.

    Reply

Leave a Comment

Up Next...

3X day while fishing

A Tuesday Trade Edition: One of the most important concepts in trading is to review your work, and learn from the good and the bad. It’s critical to identify what’s working — to do more of it. Each week, you’ll get a trade from my trading journal, in which I explain my whole thought process … Read more

Read More

Teach yourself to fish

Today, I wanted to give my Five Star Traders my top tips as to how three simple focuses in trading (and in fishing!) will help you catch what you’re fishing for.  Why the parallel to fishing specifically?… Well a couple of days ago on Twitter, I mentioned how my new hobby, fishing, has a lot … Read more

Read More

A successful setup in Chewy

A Tuesday Trade Edition: One of the most important concepts in trading is to review your work, and learn from the good and the bad. It’s critical to identify what’s working — to do more of it. Each week, you’ll get a trade from my trading journal, in which I explain my whole thought process … Read more

Read More

Subscribe Today!

Want to walk the path to trading success together? Join Danielle’s “Five Star Trader” E-Letter for market insights, tips, tricks, and special bonuses.

Sign Up Now

Free Downloads

Squeeze Checklist

When you find a squeeze, check these boxes to see if you’re looking at a higher probability bet.

Risk Checklist

Before we can make money we must define the rules that define our risk parameters.

High Probability Plays in a Directional Market

Download Danielle's free eBook

10 Steps to Becoming a Successful Trader

Commit to becoming a successful Trader

Strategy Selection Risk Gauge

Danielle focuses on creating a constant stream of income through the selection of trend-following, directional plays.

Upcoming Appearances

Check Back for Upcoming Appearances As They're Made Public

all-as-seen-on-logos