Looking for a simple and effective trading strategy? Try the 3 5 7 rule of investing. By counting the number of days, hours, or bars in a run-up or sell-off, traders can enter trades at the optimal time and maximize profits while minimizing risk. This strategy works across various markets, including stocks, forex, and commodities. Don’t believe it’s that easy? Give it a try and see how often it works.
The 3 5 7 Rule of Investing: A Simple Strategy for Profitable Trading
As an entrepreneur and business coach, I’ve learned that the key to success is having a solid strategy in place. The same is true when it comes to investing. If you want to make money in the stock market, you need a plan that is both simple and effective. That’s where the 3 5 7 rule of investing comes in.
What is the 3 5 7 Rule of Investing?
The 3 5 7 rule of investing is a simple strategy that involves counting how many days, hours, or bars a run-up or a sell-off has transpired. Then, on the third, fifth, or seventh bar, you look for a bounce in the opposite direction. It’s a straightforward approach that is surprisingly effective.
Why Does the 3 5 7 Rule Work?
The 3 5 7 rule works because it is based on the principle of market cycles. Markets move in cycles, with periods of bullishness followed by periods of bearishness. By counting the number of bars in a run-up or sell-off, you can identify when a market is due for a reversal. This allows you to enter trades at the optimal time, maximizing your profits and minimizing your risk.
How to Use the 3 5 7 Rule
Using the 3 5 7 rule is simple. First, identify a market that is trending either up or down. Then, count the number of bars in the trend. On the third, fifth, or seventh bar, look for a bounce in the opposite direction. This is your signal to enter a trade in the opposite direction of the trend.
Benefits of the 3 5 7 Rule
One of the main benefits of the 3 5 7 rule is its simplicity. You don’t need to be a financial expert to use this strategy. All you need is a basic understanding of market cycles and the ability to count to three, five, or seven. Additionally, the 3 5 7 rule is effective across a variety of markets, including stocks, forex, and commodities.
In conclusion, the 3 5 7 rule of investing is a simple yet effective strategy for profitable trading. By counting the number of bars in a trend and looking for a bounce on the third, fifth, or seventh bar, you can enter trades at the optimal time, maximizing your profits and minimizing your risk. So, whether you’re a seasoned trader or a beginner, give the 3 5 7 rule a try and see how it can help you achieve your financial goals.
References for « What is the 3 5 7 rule of investing? »
- Investopedia: Three-Five-Seven Rule
- Money Crashers: The Three-Five-Seven Investing Rule – What Is It and How Does It Work?
- The Balance: The 3-5-7 Rule for Diversification
- Kiplinger: The 3-5-7 Rule of Diversification
- CNBC: The 3-5-7 rule can help you decide how to diversify your portfolio
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